x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September
30, 2012

¨
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 0-28666

AMERICAN BIO MEDICA CORPORATION

(Exact name of registrant as specified in its charter)

New York

14-1702188

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

122 Smith Road, Kinderhook, New York

12106

(Address of principal executive offices)

(Zip Code)

518-758-8158

(Registrant's telephone number, including area code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days x
Yes ¨ No

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) x
Yes ¨ No

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act

Large accelerated filer

£

Accelerated filer

£

Non-accelerated filer

¨

Smaller reporting company

x

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ¨
Yes x No

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

21,833,003 Common Shares as of November
9, 2012

American Bio Medica Corporation

Index to Quarterly Report on Form 10-Q

For the quarter ended September 30, 2012

PAGE

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011

3

Unaudited Statements of Operations for the nine months ended September 30, 2012 and September 30, 2011

4

Unaudited Statements of Operations for the three months ended September 30, 2012 and September 30, 2011

5

Unaudited Statements of Cash Flows for the nine months ended September 30, 2012 and September 30, 2011

6

Notes to Financial Statements (unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

20

Item 4.

Controls and Procedures

20

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

20

Item 1A.

Risk Factors

20

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

20

Item 3.

Defaults Upon Senior Securities

21

Item 4.

Mine Safety Disclosures

21

Item 5.

Other Information

21

Item 6.

Exhibits

21

Signatures

22

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

American Bio Medica Corporation

Balance Sheets

September 30,

December 31,

2012

2011

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

0

$

93,000

Accounts receivable, net of allowance for doubtful accounts of $50,000 at September 30, 2012, and $66,000 at December 31, 2011

1,242,000

883,000

Inventory, net of allowance for slow moving and obsolete inventory of $469,000 at September 30, 2012 and $401,000 at December 31, 2011

The accompanying notes are an integral part of the financial
statements

6

AMERICAN BIO MEDICA CORPORATION

Notes to financial statements (unaudited)

September 30, 2012

Note A - Basis of Reporting

The accompanying unaudited
interim financial statements of American Bio Medica Corporation (the “Company”) have been prepared in accordance with
generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information
and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited interim financial statements
do not include all information and footnotes required by U.S. GAAP for complete financial statement presentation. These unaudited
interim financial statements should be read in conjunction with our audited financial statements and related notes contained in
our Annual Report on Form 10-K for the year ended December 31, 2011. In the opinion of management, the interim financial statements
include all normal, recurring adjustments which are considered necessary for a fair presentation of the financial position of the
Company at September 30, 2012, the results of our operations for the three and nine month periods ended September 30, 2012 and
September 30, 2011, and cash flows for the nine month periods ended September 30, 2012 and September 30, 2011.

Operating results for
the three and nine months ended September 30, 2012 are not necessarily indicative of results that may be expected for the year
ending December 31, 2012. Amounts at December 31, 2011 are derived from our audited financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2011.

During the nine months
ended September 30, 2012, there were no significant changes to our critical accounting policies, which are included in our Annual
Report on Form 10-K for the year ended December 31, 2011.

The preparation of
these interim financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate
estimates, including those related to product returns, bad debts, inventories, income taxes, warranty obligations, contingencies
and litigation. We base estimates on historical experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.

These unaudited interim
financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include
any adjustments that might result from the outcome of this uncertainty. Our independent registered public accounting firm’s
report on the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, contained an
explanatory paragraph regarding our ability to continue as a going concern. As of the date of this report, our current cash balances,
together with cash generated from future operations and amounts available under current credit facilities may not be sufficient
to fund operations for the next 12 months if sales levels do not improve (and an inability to market and sell our point of collection
oral fluid drug tests in the Workplace market would negatively impact our revenues). If cash generated from operations is not sufficient
to satisfy our working capital and capital expenditure requirements, we will be required to sell additional equity or obtain additional
credit facilities. There is no assurance that such financing will be available or that we will be able to complete financing on
satisfactory terms, if at all.

Recent Accounting
Standards

There were no new standards
adopted that are expected to have a material impact on our interim financial statements.

Note B – Net Loss Per Common
Share

Basic net loss per
common share is calculated by dividing the net loss by the weighted average number of outstanding common shares during the period.
Diluted net loss per common share includes the weighted average dilutive effect of stock options and warrants. Potential common
shares outstanding as of September 30, 2012 and 2011:

7

AMERICAN BIO MEDICA CORPORATION

September 30, 2012

September 30, 2011

Warrants

375,000

75,000

Options

3,139,080

3,081,580

There were no securities
included in the diluted net loss per common share for the three and nine months ended September 30, 2012 and September 30, 2011
(because the effect would have been anti-dilutive).

Note C – Litigation

On December 16, 2010,
we filed a complaint in the Supreme Court of the State of New York in Columbia County against Martin R. Gould (“Gould”),
Jacqueline Gale (“Gale”), Advanced Diagnosticum Products, Inc. (“ADPI”) and Biosure, Inc. (“Biosure”),
together the “Defendants”. The complaint alleges that Gould, our former Chief Science Officer and Executive Vice President
of Technology, and Gale, our former Vice President of Manufacturing and Development, were performing illegal, competitive, employment-related
services for ADPI and Biosure during their employment with the Company, were using Company resources to perform such services,
and were doing so in their capacity as employees and/or officers of ADPI and Biosure. Because the Defendants continue to engage
in illegal activity, in addition to the compensatory and punitive damages noted below, the complaint also seeks an injunction restraining
the Defendants from engaging in further wrongdoing. The Defendants exercised their right to move the action to federal court, and
proceedings are now pending in the United States District Court for the District of New Jersey.

In the Complaint, we
assert claims of breach of duty of loyalty, breach of contract, violation of fiduciary duty and unfair competition and conversion
specifically against Gould, and claims of breach of duty, violation of fiduciary duty and unfair competition and conversion specifically
against Gale. In addition to these claims, we assert claims of conversion, tortious interference with contract, interference with
prospective advantage and common law misappropriation of trade secret information against all Defendants. We are seeking judgment
on nine (9) causes of action for compensatory damages against Defendants in such amount as may be established at trial, together
with punitive damages in the amount of one million dollars ($1,000,000) for each cause of action in the Complaint (totaling $9,000,000).

On March 28, 2011,
the Defendants filed an Answer to our Complaint and Defendant Gould filed a counter-claim against the Company in the amount of
$150,000 alleging breach of contract related to an employment agreement between Gould and the Company. We filed a reply to Gould’s
counterclaim on April 13, 2011. Our reply asserted that the Company did not breach the prior employment agreement in place with
Gould, that the Company provided the required written notice of non-renewal of Gould’s employment agreement, and that Gould’s
employment agreement expired on May 31, 2010; at which time Gould became an at-will employee of the Company. Gould was subsequently
terminated for cause on July 28, 2010. A conference was held with the court on June 16, 2011, at which issues in dispute were discussed
and a discovery schedule was set. The Company has responded to the Defendants discovery requests and as of the date of this report,
the Company is awaiting complete responsive discovery items from Defendants. Depositions in the matter are ongoing. Depositions
and discovery were expected to be completed by April 30, 2012, however, pretrial discovery was extended to September 28, 2012 due
to an unexpected personal issue that occurred involving the Defendants attorney; this unexpected issue was unrelated to the case
or the claims of the case. On September 11, 2012, pretrial discovery was extended again to December 14, 2012.

As previously disclosed,
we received a warning letter from the U.S. Food and Drug Administration (“FDA”) in July 2009 that alleges we re marketing
our point of collection oral fluid drug test, OralStat, in workplace settings without marketing clearance or approval. A warning
letter is considered by FDA to be informal and advisory. While a warning letter communicates FDA’s position on a matter it
does not commit the FDA to taking enforcement action. We communicated to the FDA our belief (based on legal opinion) that marketing
clearance was not required in non-clinical markets. The FDA continued to disagree with our interpretation of FDA regulations related
to medical devices, and the FDA continued to assert jurisdiction of drug testing performed in the workplace. We also advised FDA
that we were willing to obtain marketing clearance but that specific technical and scientific issues existed when attempting to
utilize FDA’s draft guidance for our OralStat (because the draft guidance was written for urine drug tests). Nevertheless,
we were unable to reach a consensus with the FDA on neither the jurisdiction issue nor the technical issues.

8

AMERICAN BIO MEDICA CORPORATION

On July 10, 2012, we
announced in a press release and a Current Report on Form 8-K that we entered into a Consent Decree of Permanent Injunction (the
“Consent Decree”) with FDA. Under the terms of the Consent Decree, we will be allowed to continue to market our OralStat
drug test in the workplace market while we take action to obtain a 510(k) marketing clearance. More specifically, FDA will provide
the Company with its most recent guidance on the clinical and analytical studies that need to be conducted to gather data in support
of a 510(k) submission for OralStat. We will then have a total of 396 days to discuss protocols with FDA, complete our analytical
and clinical studies and submit a substantially complete 510(k). We have agreed to withdraw the OralStat product from the workplace
market if any of the following events occur: 1) we do not submit a substantially complete 510(k) within this specified time period,
2) we fail to submit additional information within time frames specified by FDA, 3) we withdraw our submission, or 4) our 510(k)
submission results in FDA’s determination that the product is not substantially equivalent. On August 3, 2012 the Consent
decree was approved and entered by the United States District Court for the Northern District of New York, and on August 3, 2012,
we received guidance from FDA. We are currently taking actions that will enable us to submit a 510(k) marketing application to
FDA within the time frame specified under the Consent Decree.

In addition, from time
to time, the Company is named in legal proceedings in connection with matters that arose during the normal course of business.
While the ultimate result of any such litigation cannot be predicted, if we are unsuccessful in defending any such litigation,
the resulting financial losses could have an adverse effect on the financial position, results of operations and cash flows of
the Company. We are aware of no significant litigation loss contingencies for which management believes it is both probable that
a liability has been incurred and that the amount of the loss can be reasonably estimated.

On April 20, 2012 (the
“Closing Date”), we entered into a Loan and Security Agreement (the “Loan Agreement”) with Medallion, a
Senior Lender, to refinance the Company’s Line of Credit with Rosenthal.

Under the Loan Agreement,
Medallion is providing the Company with up to $1,000,000 under a revolving secured line of credit (the “Medallion Line of
Credit”), which is secured by a first security interest in all of the Company’s receivables, inventory, and intellectual
property rights along with a second security interest in the Company’s machinery and equipment. The maximum amount available
under the Medallion Line of Credit is subject to an Advance Rate that consists of: 85% of eligible accounts receivable and up to
30% of eligible inventory (not to exceed $150,000). “Eligible Receivables” are defined as those receivables that are
paid within ninety (90) days of the invoice date. Eligible Receivables consists of both domestic sales and those international
sales made in North America. An Eligible Receivable becomes ineligible if more than 25% of the aggregate receivables due from a
customer are more than ninety (90) days past due or the aggregate receivables from a customer exceed 25% of the then total outstanding
Eligible Receivables. “Eligible Inventory” is defined as raw materials and finished goods that are not obsolete or
unmerchantable and are acceptable to Medallion.

From the loan availability
on the Closing Date, we drew approximately $566,000 to pay off our Line of Credit with Rosenthal and Rosenthal, Inc. (“Rosenthal”);
see below for further information on the Rosenthal Line of Credit).

We were charged a facility
fee of 1% of the balance of the Medallion Line of Credit on the Closing Date and will be charged the same facility fee of 1% on
each anniversary of the Closing Date thereafter. Under the Loan Agreement, interest on outstanding borrowings is payable monthly
and is charged at an annual rate equal to 4% above a base rate (which is the Wall Street Journal Prime as published from time to
time. As of the date of this report, the Wall Street Journal Prime is 3.25%). If we were to default under the Loan Agreement, interest
on outstanding borrowings under the Medallion Line of Credit would be charged at an annual rate of 2% above the interest rate in
effect at the time of such default. We are subject to two audits per year by Medallion (provided we are not in default) at a rate
of $950.00 per person per day. Prior to closing, we also paid a non-refundable fee in the amount of $10,000 to Medallion for field
exam and due diligence costs.

So long as any obligations
are due to Medallion under the Medallion Line of Credit, we must maintain stockholders’ equity of at least $1,750,000, and
as of the date of this report, we are in compliance with this requirement.

9

AMERICAN BIO MEDICA CORPORATION

We incurred $20,000
in costs related to the Medallion Line of Credit. These costs were fully expensed in the nine months ended September 30, 2012.

We incurred $8,000
and $31,000 in interest expense in the three and nine months ended September 30, 2012, respectively (no interest expense was incurred
in the three and nine months ended September 30, 2011 as we did not close on the Medallion Line of Credit until April 2012).

The amount outstanding
on the Medallion Line of Credit at September 30, 2012 was $565,000. Additional loan availability was $107,000, for a total Loan
Availability of $672,000 as of September 30, 2012. No amounts were outstanding or available at September 30, 2011, as we did not
close on the Medallion Line of Credit until April 2012.

Rosenthal Line
of Credit

We previously entered
into a Financing Agreement (the “Financing Agreement”) with Rosenthal. On February 28, 2012, we gave Rosenthal written
notice of non-renewal as provided under the Financing Agreement, and as a result, the Financing Agreement terminated on May 31,
2012.

Under the Financing
Agreement, Rosenthal provided the Company with up to $1,500,000 under a revolving secured line of credit (“Rosenthal Line
of Credit”). The Rosenthal Line of Credit was collateralized by a first security interest in all of the Company’s accounts
receivables, inventory, and intellectual property, and a second security interest in our machinery and equipment, leases, leasehold
improvements, furniture and fixtures. The maximum availability of $1,500,000 was subject to an availability formula based on certain
percentages of accounts receivable and inventory, and elements of the availability formula were subject to periodic review and
revision by Rosenthal. Under the Financing Agreement, we paid Rosenthal an administrative fee of $1,500 per month and an annual
fee of $15,000. There were additional administrative fees paid that totaled $7,000 and $23,000 in the three and nine months ended
September 30, 2011, respectively (there were no ($0) additional administrative fees charged in the three and nine months ended
September 30, 2012). Under the Financing Agreement, interest was payable monthly, and was charged at variable rates (based on the
Prime Rate), with minimum monthly interest of $4,000. We incurred $0 and $19,000, respectively in interest expense in the three
and six months ended September 30, 2012. We incurred $14,000 and $42,000, respectively, in interest expense in the three and nine
months ended September 30, 2011.

We incurred $41,000
in costs related to the Rosenthal Line of Credit. These costs were amortized over the three-year term of the Rosenthal Line of
Credit; with the remaining $4,000 in costs being amortized in the second quarter of 2012. We amortized $0 and $7,000, respectively,
in the three and nine months ended September 30, 2012. We amortized $4,000 and $11,000, respectively, in costs in the three and
nine months ended September 30, 2011.

In April 2012, we drew
approximately $566,000 from our Medallion Line of Credit to pay off the Rosenthal Line of Credit so the amount due on the Rosenthal
Line of Credit as of September 30, 2012 was $0. The amount outstanding on the Rosenthal Line of Credit at December 31, 2011 was
$397,000, with $361,000 of this amount outstanding collateralized by accounts receivable at an interest rate of 8% and $36,000
collateralized by inventory at an interest rate of 9%. Additional loan availability was $159,000, for a total Loan Availability
of $556,000 as of December 31, 2011.

On February 23, 2011,
we amended and extended our Mortgage Consolidation Loan with First Niagara Bank (“First Niagara”). The amended Mortgage
Consolidation Loan has a maturity date of March 1, 2013, and has a 6-year (72 month) amortization. The principal amount of the
amended Mortgage Consolidation Loan is $815,000 with a fixed interest rate of 8.25%. The monthly payment of principal and interest
is $14,000 and payments commenced on March 1, 2011. We were required to make a $15,000 principal payment at the time of closing
of the amended Mortgage Consolidation Loan. We also incurred approximately $2,000 in costs associated with this amendment, which
were legal costs incurred by First Niagara and passed on to the Company. These costs were fully amortized as of September 30, 2012.
The amended Mortgage Consolidation Loan continues to be secured by our facility in Kinderhook, New York as well as various pieces
of machinery and equipment. All other terms of the Mortgage Consolidation Loan remain unchanged, including compliance with a covenant
(measured monthly) to maintain a certain level of liquidity (defined as any combination of cash, marketable securities or borrowing
availability under one or more credit facilities other than the Mortgage Consolidation Loan). As of the date of this report, we
are in compliance with this covenant.

10

AMERICAN BIO MEDICA CORPORATION

The balance on the
Mortgage Consolidation Loan was $639,000 at September 30, 2012 and $725,000 at December 31, 2011. Interest expense recognized in
the nine months ended September 30, 2012 was $43,000 and interest expense recognized in the nine months ended September 30, 2011
was $50,000. Interest expense was $14,000 and $16,000, respectively, during the three months ended September 30, 2012 and September
30, 2011.

Copier Leases

In May 2007, we purchased
a copier through an equipment lease with RICOH in the amount of $17,000. The term of the lease is five years with an interest rate
of 14.11%. In April 2012, we notified RICOH that we were opting to purchase the copier for $1.00 as provided in our lease. The
amount outstanding on this lease was $0 at September 30, 2012 and $3,000 at December 31, 2011.

In October 2010, we
purchased a copier through an equipment lease with Marlin Leasing in the amount of $4,000. The term of the lease is three years
with an interest rate of 14.46%. The amount outstanding on this lease was$1,000 at September 30, 2012 and $2,000 at December 31,
2011.

Debenture Financing

In August 2008, we
completed an offering of Series A Debentures (“Series A Debentures”) and received gross proceeds of $750,000. The net
proceeds of the offering of Series A Debentures were $631,000 after $54,000 of placement agent fees and expenses, legal and accounting
fees of $63,000 and $2,000 of state filing fees.

The Series A Debentures
accrued interest at a rate of 10% per annum (payable by the Company semi-annually). As placement agent, Cantone Research, Inc.
(“Cantone”) received a placement agent fee of $52,500, or 7% of the gross principal amount of Series A Debentures sold.
In addition, we issued Cantone a four-year warrant to purchase 30,450 shares of the Company’s common stock at an exercise
price of $0.37 per share (the closing price of the Company’s common shares on the date of closing) and a four-year warrant
to purchase 44,550 shares of the Company’s common stock at an exercise price of $0.40 per share (the closing price of the
Company’s common stock on the Series A Debentures completion date). All warrants issued to Cantone were immediately exercisable
upon issuance. We registered the common shares underlying the Series A Debentures in a registration statement on Form S-3 filed
with the SEC on April 15, 2009 and amended on May 5, 2009. On June 10, 2009, the SEC issued a notice of effectiveness related to
this Form S-3, as amended.

We incurred $131,000
in expenses related to the offering, including $12,000 in expense related to warrants issued to Cantone. We amortized $19,000 of
expense related to these debt issuance costs in the nine months ended September 30, 2012, of which a little under $2,000 was share
based payment expense related to the Cantone warrants, and $24,000 of expense in the nine months ended September 30, 2011, of which
just over $2,000 was share based payment expense related to the Cantone warrants. We amortized $3,000 of expense in the three months
ended September 30, 2012 and $8,000 of expense in the three months ended September 30, 2011; of which less than $1,000 was share
based payment expense related to the Cantone warrants in both periods.

The unamortized balance
was $0 as of September 30, 2012 (as the Series A Debentures matured on August 1, 2012) and $19,000 as of December 31, 2011. We
also had $0 in accrued interest expense related to the Series A Debentures at September 30, 2012 and $31,000 December 31, 2011.
The Company recognized $44,000 in interest expense during the nine months ended September 30, 2012 and $56,000 in interest expense
during the nine months ended September 30, 2011. The Company recognized $6,000 in interest expense in the three months ended September
30, 2012 and $19,000 in interest expense in the three months ended September 30, 2011.

11

AMERICAN BIO MEDICA CORPORATION

Series A Debenture
Extension

The Series A Debentures
matured on August 1, 2012. On July 25, 2012, we entered into a Placement Agent Agreement (the “Agent Agreement”) with
Cantone. Under the terms of the Agent Agreement, Cantone acted as our exclusive placement agent in connection with an amendment
of the Series A Debentures. Under the amendment, the term of Series A Debentures was extended to reflect a due date of August 1,
2013, and the interest rate during the extension period was increased from 10% to 15% per annum, due quarterly in arrears.

As compensation for
their placement agent services, Cantone received a cash fee of 5% of the gross amount of existing Series A Debentures, or $37,500,
and the warrants issued to Cantone (in connection with their services as placement agent in the original Series A Debenture financing)
were amended to reflect a purchase price of $0.17 per share and a new term of three (3) years. Cantone also received 1% of the
gross amount of Series A Debentures, or $7,500, as a non-accountable expense allowance and we reimbursed Cantone $5,000 in legal
fees incurred in connection with the amendment of the Series A Debentures. We will amortize the costs (totaling $50,000) associated
with the amendment of the Series A Debentures over the term of the extension (12 months). We amortized $8,000 of these costs in
the three months ended September 30, 2012.

On July 30, 2012, we
entered into a Bridge Loan Agreement and Note (the “Bridge Loan”) with Cantone Asset Management, LLC (“CAM”).
The Bridge Loan is in the amount of $150,000 and was used to pay $100,000 to those Holders of Series A Debentures that did not
wish to amend/extend the Series A Debentures and $50,000 was used to pay placement agent fees and expenses previously indicated
in the previous paragraph.

The maturity date of
the Bridge Loan is August 1, 2013 and it bears simple interest in advance of 15%. In addition to the interest, on August 1, 2012,
the Company instructed its transfer agent to issue CAM restricted stock of the Company equal to 10% of the gross amount of existing
Series A Debentures, or $15,000 using a value of $0.17 per common share. On August 8, 2012, 88,235 restricted common shares were
issued to CAM.

On July 31, 2012, we
entered into an Agreement to the Series A Debenture (the “Debenture Amendment”) with thirty-two of the thirty-seven
holders of Series A Debentures (the “Debenture Holders”) (representing $645,000 of Series A Debentures). As previously
indicated, the Debenture Amendment extends the due date of the Series A Debenture to August 31, 2013 and increased the interest
rate to 15% per annum, payable quarterly in arrears. All other terms of the Series A Debentures remain unchanged. Five of the Debenture
Holders (representing $105,000 in Series A Debentures) did not wish to extend the Series A Debentures and we used proceeds of $100,000
from the Bridge Loan and $5,000 paid directly from the Company to pay principal amounts due to these non-extending Debenture Holders.

On August 1, 2012,
the Company entered into a Consulting Agreement (“Consulting Agreement”) with CAM. The Consulting Agreement commenced
August 1, 2012 and ends on August 1, 2013. Under the terms of the Consulting Agreement, CAM will provide the Company with financial
advisory services and advice related to debt refinancing. On August 1, 2012, the Company issued CAM warrants to purchase 300,000
shares of the Company’s common stock at an exercise price of $0.16 per share (the closing price of the Company’s common
shares on August 1, 2012). The warrants are exercisable through July 31, 2015 and have piggyback registration rights (see Part
I, Item 1, Note E, “Series A Debenture Extension-Warrants”).

Note E – Stock Option Grants
/ Warrant Grants

Rosenthal Financing
Option Grants

As a condition to the
Financing Agreement with Rosenthal, our Chief Executive Officer, Stan Cipkowski (“Cipkowski”) was required to execute
a Validity Guarantee (the “Validity Guarantee”) that includes representations and warranties with respect to the validity
of the Company’s receivables and guarantees the accuracy of the Company’s reporting to Rosenthal related to its receivables
and inventory. The Validity Guarantee places Cipkowski’s personal assets at risk in the event of a breach of such representations,
warranties and guarantees. As part of the compensation for his execution of the Validity Guarantee, on July 1, 2009, Cipkowski
was awarded an option grant representing 500,000 common shares of the Company under its Fiscal 2001 Stock Option Plan (the “2001
Plan”), at an exercise price of $0.20, the closing price of the Company’s common shares on the date of the grant. The
option grant vests over 3 years in equal installments, and the first 33% (165,000 common shares) of the grant vested on July 1,
2010, the second 33%, (165,000 common shares) vested on July 1, 2011 and the final 34% (170,000 common shares) vested on July 1,
2012. We recognized $78,000 in share-based payment expense amortized over the required service period of 3 years. We recognized
$13,000 in share-based payment expense for this grant in the nine months ended September 30, 2012 and $20,000 in share-based payment
expense in the nine months ended September 30, 2011. We recognized $0 in share-based payment expense for this grant in the three
months ended September 30, 2012 and $6,000 in share-based payment expense in the three months ended September 30, 2011. As of September
30 2012, there was $0 in unrecognized expense with 0 months remaining.

12

AMERICAN BIO MEDICA CORPORATION

As another condition
to the Financing Agreement with Rosenthal, the Company’s President and Chairman of the Board, Edmund M. Jaskiewicz (“Jaskiewicz”)
was required to execute an Agreement of Subordination and Assignment (“Subordination Agreement”) related to $124,000
owed to Jaskiewicz by the Company as of June 29, 2009 (the “Jaskiewicz Debt”). Under the Subordination Agreement, the
Jaskiewicz Debt was not payable, was junior in right to the Rosenthal Line of Credit and no payment could be accepted or retained
by Jaskiewicz unless and until the Company satisfied in full any obligations to Rosenthal. Furthermore, the Jaskiewicz Debt was
assigned and transferred to Rosenthal as collateral for the Rosenthal Line of Credit.

As compensation for
his execution of the Subordination Agreement, on July 1, 2009 Jaskiewicz was awarded an option grant representing 50,000 common
shares of the Company under its 2001 Plan at an exercise price of $0.20, the closing price of the Company’s common shares
on July 1, 2009. The option grant (50,000 common shares) was 100% immediately exercisable on July 31, 2009. We recognized $8,000
during the year ended December 31, 2009 in share-based payment expense related to the grant of Jaskiewicz’s options upon
issuance of the grant.

On July 1, 2010 (the
first anniversary of the original stock option grant date of July 1, 2009), Jaskiewicz was awarded a second option grant representing
50,000 common shares of the Company under the Company’s 2001 Plan, at an exercise price of $0.07, the closing price of the
Company’s common shares on July 1, 2010. The option grant (50,000 common shares) was 100% immediately exercisable on July
1, 2010. During the year ended December 31, 2010, we recognized $3,000 in share-based payment expense for this grant.

On July 1, 2011, (the
second anniversary of the original stock option grant date of July 1, 2009), Jaskiewicz was awarded an additional option grant
representing 50,000 common shares of the Company under the Company’s 2001 Plan, at an exercise price of $0.12, the closing
price of the Company’s common shares on July 1, 2011. The option grant (50,000 common shares) was 100% immediately exercisable
on July 1, 2011. We recognized the full share-based payment expense of $6,000 in the three months ended September 30, 2011.

December 2010 Employee
Grant

On December 31, 2010,
we issued options to purchase 275,000 shares of common stock under the 2001 Plan to 4 members of senior management and 8 other
employees of the Company at an exercise price of $0.09 (the closing price of the Company’s common shares on December 31,
2010). These option grants vested 100% (275,000 common shares) on December 31, 2011. We recognized $25,000 in share-based payment
expense over the required service period of one year. We recognized $0 in share-based payment expense related to these grants in
the nine months ended September 30, 2012, and $20,000 of this expense in the nine months ended September 30, 2011. As of September
30, 2012, there was $0 in unrecognized expenses with 0 months remaining.

Medallion Line of Credit Stock Options

As a condition to the
Medallion Line of Credit, Cipkowski and our controller J. Duncan Urquhart (“Urquhart”) were each required to execute
Validity Guarantees (the “Validity Guarantees”). Under the Validity Guarantees, Cipkowski and Urquhart provide representations
and warranties with respect to the validity of our receivables as well as guaranteeing the accuracy of our reporting to Medallion
related to the Company’s receivables.

Cipkowski Medallion
Grant

As compensation for
his execution of the Validity Guarantee, on April 20, 2012, Cipkowski was awarded an option grant representing 250,000 common shares
of the Company under the Company’s Fiscal 2001 stock option plan, at an exercise price of $0.18, the closing price of our
common shares on April 20, 2012. The option grants vest over three (3) years in installments of 33% on April 20, 2013 (82,500 common
shares), 33% on April 20, 2014 (82,500 common shares) and 34% (85,000 common shares) on April 20, 2015.

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AMERICAN BIO MEDICA CORPORATION

The fair value of the
Cipkowski stock option grants was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions
were used: dividend yield of 0%; risk-free interest rate of 1.99; expected life of 10 years; and stock price volatility of 88%.
The value of the stock option grant is $45,000 and the Company will recognize this share-based payment expense over the vesting
period of 3 years. We recognized $4,000 in share-based payment expense in the three months ended September 30, 2012 and $8,000
in the nine months ended September 30, 2012. As of September 30, 2012, there was $37,000 in unrecognized share-based payment expense
with 30 months remaining.

Urquhart Medallion
Grant

As compensation for
his execution of the Validity Guarantee, on April 20, 2012, Urquhart was awarded an option grant representing 250,000 common shares
of the Company under the Company’s Fiscal 2001 stock option plan, at an exercise price of $0.18, the closing price of our
common shares on April 20, 2012. The option grants vest over three (3) years in installments of 33% (82,500 common shares) on April
20, 2013, 33% (82,500 common shares) on April 20, 2014 and 34% (85,000 common shares) on April 20, 2015.

The fair value of the
Urquhart stock option grant was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions
were used: dividend yield of 0%; risk-free interest rate of 1.99; expected life of 10 years; and stock price volatility of 88%.
The value of the stock option grant is $45,000 and the Company will recognize this share-based payment expense over the vesting
period of 3 years. We recognized $4,000 in share-based payment expense in the three months ended September 30, 2012 and $8,000
in the nine months ended September 30, 2012. As of September 30, 2012, there was $37,000 in unrecognized share-based payment expense
with 30 months remaining.

Jaskiewicz Medallion
Grant

As another condition
to the Medallion Line of Credit, Jaskiewicz was required to execute another Subordination Agreement (“Subordination Agreement”)
related to the Jaskiewicz Debt (the $124,000 currently owed to Jaskiewicz by the Company). Under the Subordination Agreement, the
Jaskiewicz Debt is not payable, is junior in right to the Medallion Line of Credit and no payment may be accepted or retained by
Jaskiewicz for the Jaskiewicz Debt unless and until we have paid and satisfied in full any obligations to Medallion. As compensation
for his execution of the Subordination Agreement, on April 20, 2012 Jaskiewicz was awarded an option grant representing 150,000
common shares of the Company under the Company’s Fiscal 2001 stock option plan, at an exercise price of $0.18, the closing
price of the Company’s common shares on April 20, 2012. The option grant vests over three (3) years in installments as follows:
33% (49,500 common shares) on April 20, 2013, 33% (49,500 common shares) on April 20, 2014 and 34% (51,000 common shares) on April
20, 2015.

The fair value of the
Jaskiewicz stock option grant was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions
were used: dividend yield of 0%; risk-free interest rate of 1.99; expected life of 10 years; and stock price volatility of 88%.
The value of the stock option grant is $27,000 and the Company will recognize this share-based payment expense over the vesting
period of 3 years. We recognized $2,000 in share-based payment expense in the three months ended September 30, 2012 and $4,000
in share-based payment expense in the nine months ended September 30, 2012. As of September 30, 2012, there was $23,000 in unrecognized
share-based payment expense with 30 months remaining.

Series A Debenture
Extension – Warrants

CRI Warrants

On July 31, 2012, we
issued CRI warrants to purchase 75,000 shares of the Company’s common stock at an exercise price of $0.17 per share (the
closing price of the Company’s common shares on July 31, 2012) (“CRI Warrants”). The CRI warrants are exercisable
through July 31, 2015 (see Part I, Item I, Note E, “Series A Debenture Extension”). The fair value of the CRI Warrants
was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions were used: dividend
yield of 0%; risk-free interest rate of 1.51; expected life of 3 years; and stock price volatility of 77%. The value of the CAM
Warrant is $12,000 and the Company recognized $12,000 (or the full expense) in share based payment expense in the three and nine
months ended September 30, 2012.

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AMERICAN BIO MEDICA CORPORATION

CAM Warrants

On August 1, 2012,
we issued CAM warrants to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.16 per share (the
closing price of the Company’s common shares on August 1, 2012) (“CAM Warrants”). The CAM Warrants are exercisable
through July 31, 2015 and have piggyback registration rights (see Part I, Item I, Note E, “Series A Debenture Extension”).
The fair value of the CAM Warrants was estimated utilizing the Black-Scholes option-pricing model. The following weighted average
assumptions were used: dividend yield of 0%; risk-free interest rate of 1.56; expected life of 3 years; and stock price volatility
of 77%. The value of the CAM Warrant is $48,000 and the Company recognized $48,000 (or the full expense) in share based payment
expense in the three and nine months ended September 30, 2012.

September 2012 Employee
Grants

On
September 20, 2012, we issued 2 stock option grants to purchase 50,000 shares (for a total of 100,000) of the Company’s common
stock to 2 non-executive employees at an exercise price of $0.18 (the closing price of the Company’s common shares on September
20, 2012). Both option grants vest over 3 years in installments as follows: 33% (33,000 common shares total) on September 20, 2013,
33% (33,000 common shares total) on September 20, 2014 and 34% (34,000 common shares total) on September 20, 2015.

We will recognize $18,000
in share-based payment expense over the vesting period of 3 years. We recognized less than $1,000 in share-based payment expense
related to these grants in the three and nine months ended September 30, 2012. As of September 30, 2012, there was over $17,000
in unrecognized expenses with 35 months remaining.

Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations

General

The following discussion
of our financial condition and the results of operations should be read in conjunction with the interim Financial Statements and
Notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains, in addition to historical statements,
forward-looking statements that involve risks and uncertainties. Our actual future results could differ significantly from the
results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are
not limited to, the factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the
year ended December 31, 2011, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K on file with the SEC. Any
forward-looking statement speaks only as of the date on which such statement is made and we do not intend to update any such forward-looking
statements.

Overview

Sales in the nine months
ended September 30, 2012 increased 2.1% when compared to the nine months ended September 30, 2011, although sales in the three
months ended September 30, 2012 (“Third Quarter 2012”) decreased 3.5% when compared to the three months ended September
30, 2011 (“Third Quarter 2011”). Conditions in the global economy remain inconsistent and uncertain. Our core markets,
Workplace and Government, are greatly affected by this economic uncertainty. We continue to believe that it will be some time before
employment rates and government budgets return to pre-recession levels and remain at those levels, and therefore sometime before
we will experience consistent, significant sales growth in these markets.

Given this uncertainty,
we continue to examine all expenses closely in efforts to achieve profitability (if sales levels improve) or to minimize losses
going forward (if sales remain at current levels decline). During the nine months ended September 30, 2012 we sustained a net loss
of $546,000 from net sales of $7,041,000. We had cash used in operating activities of $125,000 for the nine months ended September
30, 2012.

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AMERICAN BIO MEDICA CORPORATION

During the nine months
ended September 30, 2012, we continued to market and distribute our point of collection products to detect the presence or absence
of drugs of abuse in a urine or oral fluid specimen and our Rapid Reader® drug screen result and data management system. We
also performed bulk test strip contract manufacturing services for unaffiliated third parties, and continued to focus our efforts
on the sale of our CLIA waived Rapid TOX® product line.

Plan of Operations

We continue to focus
on selling our point of collection drugs of abuse tests, and growing our business through direct sales (including but not limited
to the pursuit of national accounts) and select distributors. We also continue to make efforts to identify and secure new contract
work, such as contract manufacturing or contract assembly. Simultaneously with these efforts, we continue to concentrate on: the
reduction of manufacturing costs and operating expenses, enhancement of our current products and development of new product platforms
and configurations to address market trends.

Our continued existence
is dependent upon several factors, including our ability to raise revenue levels and reduce costs to generate positive cash flows,
and to obtain working capital by selling additional shares of Company common stock and/or securing additional credit facilities,
as necessary.

RESULTS OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2012 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2011

Net Sales: Net
sales in the nine months ended September 30, 2012 increased 2.1% when compared to net sales in the nine months ended September
30, 2011. Our sales were negatively impacted in the nine months ended September 30, 2011 due to the temporary and voluntarily cessation
of marketing and selling of our oral fluid product in the Workplace market throughout most of the three months ended March 31,
2011 (“First Quarter 2011”). Workplace sales (some of which are national account oral fluid customers) improved; this
was primarily a result of marketing cessation in the First Quarter 2011 referred to earlier in this paragraph, and the fact that
unemployment rates improved slightly from 9.0% in September 2011 to 7.8% in September 2012 (although the jobless rate only improved
slightly over the course of nine months ended September 30, 2012 from 8.3% in January 2012 to 7.8% in September 2012).

Contract manufacturing
sales improved when comparing the nine months ended September 30, 2012 with the nine months ended September 30, 2011 as a result
of increased contract manufacturing of a product to detect fetal amniotic rupture and a product to detect RSV (respiratory syncytial
virus).

Government sales declined
in the nine months ended September 30, 2012 when compared to the nine months ended September 30, 2011. Sales to government accounts
continue to be negatively impacted by price pressures caused by competitors selling products manufactured outside of the United
States. Most government contracts are awarded via an open solicitation process and in most cases, the company with the lowest priced
product is awarded the contract. Since foreign manufacturers can offer their products at a lower price due to lower costs, including
but not limited to, lower labor, material, regulatory and insurance costs, it has become increasingly difficult to compete from
a cost standpoint. In addition, for some of the contracts we currently hold, decreased purchasing levels (in attempts to close
budget deficits), have resulted in decreased buying by our customers.

International sales
declined due to decreased sales to Latin America, offset by increased sales in other part of the world, including sales to Dräger
Safety (under their trademark “DrugCheck”; in July 2011, we entered into a Purchase Agreement with Dräger Safety
giving Dräger Safety distribution rights in Europe, Asia, Africa, and Central and South America; with certain markets and
territories being exclusive to Dräger Safety).

COST OF GOODS SOLD/GROSS
PROFIT: Cost of goods sold increased slightly to 58.9% of net sales in the nine months ended September 30, 2012, compared to
58.3% of net sales in the nine months ended September 30, 2011. Gross profit in the nine months ended September 30, 2012 was also
relatively unchanged from the nine months ended September 30, 2011. We continuously monitor inventory levels and the amount of
product being manufactured, however, certain direct labor and overhead costs are fixed, so when sales fluctuate up or down, those
fixed costs are allocated to a reduced or increased number of manufactured strips, thus affecting our manufacturing cost per unit.
When comparing the nine months ended September 30, 2012 with the nine months ended September 30, 2011, sales mix and manufacturing
costs were relatively unchanged. We continuously evaluate our production personnel levels as well as our product manufacturing
levels to ensure they are adequate to meet current and anticipated sales demands.

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AMERICAN BIO MEDICA CORPORATION

OPERATING EXPENSES:
Operating expenses increased 8.9% in the nine months ended September 30, 2012, when compared to the nine months ended September
30, 2011. We continuously assess our operating expenses to ensure they are adequate to elicit growth, support sales levels and
address market trends and customer needs. In the nine months ended September 30, 2012, research and development expenses decreased
slightly, and general and selling and marketing expense both increased; more specifically:

Research and Development (“R&D”)
expense

R&D expense decreased when
comparing the nine months ended September 30, 2012 with the nine months ended September 30, 2011. Decreases in salaries, employee
related taxes and benefits and supplies were offset by increases in FDA compliance costs and phone/dues/patent fees. The decrease
in salaries results from an employee departure. Our R&D department continues to focus their efforts on the enhancement of current
products, development of new product platforms and exploration of contract manufacturing opportunities.

Selling and Marketing expense

Selling and marketing expense
for the nine months September 30, 2012 increased 13.9% when compared to the nine months ended September 30, 2011. This increase
is primarily a result of increases in sales salaries and employee related benefits (due to increased sales personnel), commissions
(as a result of increased sales and sales personnel compensation changes), trade show expense, and advertising related expenses,
offset by decreases in travel related expense (as a result of sales personnel compensation changes), postage and telephone costs.
In the nine months ended September 30, 2012, we continued to promote our products through advertising, participation at trade shows
and other marketing activities. Our direct sales force continued to focus their selling efforts in our target markets, which include,
but are not limited to, Workplace and Government, as well as focusing on the Clinical market, primarily physicians and pain management
clinics, with our CLIA waived Rapid TOX product line.

General and Administrative
(“G&A”) expense

G&A expense for the
nine months ended September 30, 2012 increased 6.1% when compared to the nine months ended September 30, 2011. Increases in
investor relation costs (primarily from increased SEC report fees and expenses), patent and license costs, travel related
expense, outside service fees (stemming from compliance with regulatory requirements related to sales outside of the United
States), quality control salaries, and share-based payment expense were partially offset by decreases in warehouse salaries,
shipping supplies, administrative salaries, consulting fees, accounting fees and utilities. Share-based payment expense was
$93,000 in the nine months ended September 30, 2012 compared to $45,000 in the nine months ended September 30, 2011. This
increase is primarily due to the issuance (and full expense recognition in the nine months ended September 30, 2012) of
warrants to CRI and CAM in connection with the extension of the Series A Debentures (see Part I, Item I, Note E,
“Series A Debenture Extension-Warrants”).

RESULTS OF OPERATIONS FOR THE THIRD
QUARTER 2012 COMPARED TO THE THIRD QUARTER 2011

Net Sales: Net
sales in the Third Quarter 2012 declined 3.5% when compared to net sales in the Third Quarter 2011. Sales to workplace accounts
(including sales to national accounts) increased as unemployment rates improved slightly from 9.0% in September 2011 to 7.8% in
September 2012 (although the jobless rate only improved slightly over the course of Third Quarter 2012 from 8.3% in July 2012 to
7.8% in September 2012).

Contract manufacturing
sales continued to improve when comparing the Third Quarter 2012 with the Third Quarter 2011 as a result of increased contract
manufacturing of a product to detect fetal amniotic rupture and a product to detect RSV (respiratory syncytial virus).

Government sales declined
in the Third Quarter 2012 when compared to the Third Quarter 2011 for the same reasons discussed previously in the discussion related
to the results of the nine months ended September 30, 2012 to the nine months ended September 30, 2011.

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AMERICAN BIO MEDICA CORPORATION

International sales
increased due to increased sales in Latin America and sales in the European Union, including sales to Dräger Safety (under
their trademark “DrugCheck”; in July 2011, we entered into a Purchase Agreement with Dräger Safety giving Dräger
Safety distribution rights in Europe, Asia, Africa, and Central and South America; with certain markets and territories being exclusive
to Dräger Safety). These increases were offset by decreased sales in other parts of the world.

COST OF GOODS SOLD/GROSS
PROFIT: Cost of goods sold increased to 61.0% of net sales in the Third Quarter 2012, compared to 59.2% of net sales in the
Third Quarter 2011. Gross profit in the Third Quarter 2012 decreased to 39.0% when compared to 41.8% reported in the Third Quarter
2011. This increase in cost of goods as a percentage of sales stems primarily from a shift in sales mix (from sales of a higher
margin in the Third Quarter 2011 to sales of a lower margin in the Third Quarter 2012).

OPERATING EXPENSES:
Operating expenses increased 19.2% in the Third Quarter 2012, when compared to the Third Quarter 2011. We continuously assess our
operating expenses to ensure they are adequate to elicit growth, support sales levels and address market trends and customer needs.
In the Third Quarter 2012, research and development expenses decreased slightly, while general and administrative and selling and
marketing expense increased; more specifically:

Research and Development (“R&D”)
expense

R&D expense decreased 11.5%
when comparing the Third Quarter 2012 with the Third Quarter 2011. Decreases in salaries and employee related benefits (as a result
of an employee departure) and supplies were partially offset by an increase in FDA compliance costs. Our R&D department continues
to focus their efforts on the enhancement of current products, development of new product platforms and exploration of contract
manufacturing opportunities.

Selling and Marketing expense

Selling and marketing expense
for the Third Quarter 2012 increased 8.6% when compared to the Third Quarter 2011. This increase is primarily a result of increases
in commissions (as a result of sales personnel compensation changes), trade show related expenses and other advertising related
costs, offset by decreases in sales salaries and travel related expense (as a result of the same sales personnel compensation changes),
postage and telephone. In the Third Quarter 2012, we continued to promote our products through advertising, participation at trade
shows and other marketing activities. Our direct sales force continued to focus their selling efforts in our target markets, which
include, but are not limited to, Workplace and Government, as well as focusing on the Clinical market, primarily physicians and
pain management clinics, with our CLIA waived Rapid TOX product line.

General and Administrative
(“G&A”) expense

G&A expense for the Third
Quarter 2012 increased 32.7% when compared to the Third Quarter 2011. Increases in administrative salaries (due to the return of
a senior employee in operations), quality assurance salaries, patent and license costs, consulting fees and share-based payment
expense were partially offset by decreases in warehouse salaries and shipping supplies, accounting fees and bank service fees.
Share-based payment expense was $70,000 in the Third Quarter of 2012 compared to $19,000 in the Third Quarter 2011. This increase
stems primarily from the issuance (and full expense recognition in the Third Quarter 2012) of warrants to CRI and CAM in connection
with the extension of the Series A Debentures (see Part I, Item I, Note E, “Series A Debenture Extension-Warrants”).

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AMERICAN BIO MEDICA CORPORATION

Liquidity and Capital Resources as of
September 30, 2012

Our cash requirements
depend on numerous factors, including product development activities, penetration of our core markets, and effective management
of inventory levels and production levels in response to sales forecasts. We expect to devote capital resources to continue product
development and research and development activities. We will examine other growth opportunities including strategic alliances and
expect such activities will be funded from existing cash and cash equivalents, issuance of additional equity or additional borrowings,
subject to market and other conditions. Our financial statements for the year ended December 31, 2011 were prepared assuming we
will continue as a going concern. As of the date of this report, we do not believe that our current cash balances, together with
cash generated from future operations and amounts available under our credit facilities will be sufficient to fund operations for
the next twelve months. As of the date of filing this report, our First Niagara Mortgage Consolidation Loan will expire in less
than 12 months. The Series A Debentures were set to expire on August 1, 2012, however we extended the Series A Debentures until
August 1, 2013 (See Part I; Item I; Note D – Line of Credit and Debt). The Company is exploring possible financing alternatives
for both of these credit facilities; including but not limited to extension and/or refinancing of the current credit facilities.
If cash generated from operations is not sufficient to satisfy our working capital and capital expenditure requirements, we will
be required to sell additional equity or obtain additional credit facilities. There is no assurance that such financing will be
available or that we will be able to complete financing on satisfactory terms, if at all.

As of September 30,
2012, we had a Mortgage Consolidation Loan with First Niagara and a Line of Credit with Medallion. The Medallion Line of Credit
had a total loan availability of $672,000 as of September 30, 2012, with $107,000 of this amount available for borrowing.

Working capital

Our working capital
decreased $1,017,000 at September 30, 2012 when compared to working capital at December 31, 2011 primarily as a result of the reclassification
of our Mortgage Consolidation Loan with First Niagara from long term debt to short term debt (considering its maturity date of
March 2, 2013). In addition, a decrease in cash and an increase in accounts payables were offset by a decrease in inventory, and
increases in accounts receivable and prepaid assets.

We have historically
satisfied net working capital requirements through cash from operations, bank debt, occasional proceeds from the exercise of stock
options and warrants (approximately $623,000 since 2002) and through the private placement of equity securities ($3,299,000 in
gross proceeds since August 2001, with net proceeds of $2,963,000 after placement, legal, transfer agent, accounting and filing
fees).

Dividends

We have never paid
any dividends on our common shares and anticipate that all future earnings, if any, will be retained for use in our business, and
therefore, we do not anticipate paying any cash dividends.

Cash Flows

Increases in accounts
receivable and prepaid expenses and other current assets, offset by increases in accounts payable and provision for slow moving
and obsolete inventory resulted in cash used in operating activities of $125,000 for the nine months ended September 30, 2012.
The primary use of cash in the nine months ended September 30, 2012 and the nine months ended September 30, 2011 was funding of
operations.

Net cash used in investing
activities in the nine months ended September 30, 2012 was for investment in property, plant and equipment and patent application
costs, net cash used in investing activities in the nine months ended September 30, 2011 was for investment in property, plant
and equipment.

Net cash provided by
financing activities in the nine months ended September 30, 2012 consisted of proceeds from a bridge loan and net proceeds from
our line of credit, offset by payments on debt financing and debt issuance costs, while cash used in financing activities in the
nine months ended September 30, 2011 consisted primarily of payments on debt financing offset by proceeds from an equipment loan
and net proceeds from our line of credit.

At September 30, 2012,
we had cash and cash equivalents of $0.

Outlook

Given our current sales
levels and results of operations, we expect that we may need to raise additional capital in the year ending December 31, 2012 to
be able to continue operations. If events and circumstances occur such that we do not meet our current operating plans, we are
unable to raise sufficient additional equity or debt financing, or our credit facilities are insufficient or not available, we
may be required to further reduce expenses or take other steps which could have a material adverse effect on our future performance.

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AMERICAN BIO MEDICA CORPORATION

Our primary short-term
working capital needs relate to our efforts to increase high volume sales in the drugs of abuse testing market, to refine manufacturing
and production capabilities and establish adequate inventory levels to support expected sales, while continuing support of research
and development activities. We believe that our current infrastructure is sufficient to support our business; however, if at some
point in the future we experience renewed growth in sales, we may be required to increase our infrastructure to support sales.
It is also possible that additional investments in research and development, and increased expenditures in selling and marketing
and general and administrative departments may be necessary in the future to: develop new products, enhance current products to
meet the changing needs of the point of collection drugs of abuse testing market, grow contract manufacturing operations, promote
our products in our markets and institute changes that may be necessary to comply with various public company reporting requirements,
as well as FDA requirements related to the marketing and use of our products. We continue to take measures to attempt to control
the rate of increase of these costs to be consistent with any sales growth rate we may experience in the near future.

Item 3. Quantitative and Qualitative Disclosures About Market
Risk

As a smaller reporting company, we are not
required to provide the information required by this item.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls
and Procedures

Our Chief Executive
Officer (Principal Executive Officer)/Chief Financial Officer (Principal Financial Officer), together with other members of management,
has reviewed and evaluated the effectiveness of our “disclosure controls and procedures” (as defined in the Securities
Exchange Act of 1934 Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on this review and
evaluation, our Principal Executive Officer/Principal Financial Officer concluded that our disclosure controls and procedures are
effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely
manner.

(b) Changes in Internal
Control Over Financial Reporting

There have been no
changes in our internal control over financial reporting during the last quarterly period covered by this report that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Item 1,
Note C in the Notes to interim Financial Statements included in this report for a description of pending legal proceedings in which
we may be a party.

Item 1A. Risk Factors

There have been no
material changes to our risk factors set forth in Part I, Item 1A, in our Annual Report on Form 10-K for the year ended December
31, 2011, set forth in Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended June 30, 2012 or set forth in
our Current Report on Form 8-K filed with the Commission on July 10, 2012.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

As compensation for
their placement agent services related to the extension of the Series A Debentures, on July 31, 2012, we issued Cantone Research,
Inc. warrants to purchase 75,000 shares of the Company’s common stock at an exercise price of $0.17 per share (the closing
price of the Company’s common shares on July 31, 2012) (“CRI Warrants”). The CRI warrants are exercisable through
July 31, 2015 (see Part I, Item I, Note E, “Series A Debenture Extension”).

On August 1, 2012,
we issued Cantone Asset Management, LLC warrants to purchase 300,000 shares of the Company’s common stock at an exercise
price of $0.16 per share (the closing price of the Company’s common shares on August 1, 2012) (“CAM Warrants”).
The CAM Warrants are exercisable through July 31, 2015 and have piggyback registration rights (see Part I, Item I, Note E, “Series
A Debenture Extension”).

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AMERICAN BIO MEDICA CORPORATION

In connection with
our Bridge Loan from Cantone Asset Management, LLC (see Part I, Item 1, Note D, “Series A Debenture Extension”), on
August 1, 2012, we instructed our transfer agent to issue CAM restricted stock of the Company equal to 10% of the gross amount
of existing Series A Debentures, or $15,000 using a value of $0.17 per common share. On August 8, 2012, 88,235 restricted shares
of the Company’s common stock were issued to CAM.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

4.19

Placement Agent Agreement by and between the Company and Cantone Research, Inc (incorporated by reference from Exhibit 4.19 to the Company’s Current Report on Form 8-K filed with the Commission on July 31, 2012).

4.20

Bridge Loan Agreement by and between the Company and Cantone Asset Management, LLC (incorporated by reference from Exhibit 4.20 to the Company’s Current Report on Form 8-K filed with the Commission on July 31, 2012).

4.21

Note (Bridge Loan) by and between the Company and Cantone Asset Management, LLC (incorporated by reference from Exhibit 4.21 to the Company’s Current Report on Form 8-K filed with the Commission on July 31, 2012).

4.22

Form of Debenture Amendment between the Company and Debenture Holders (incorporated by reference from Exhibit 4.22 to the Company’s Current Report on Form 8-K/A filed with the Commission on August 6, 2012).

4.23

Consulting Agreement between the Company and Cantone Asset Management, LLC (incorporated by reference from Exhibit 4.23 to the Company’s Current Report on Form 8-K/A filed with the Commission on August 6, 2012).

10.26

Employment Contract between the Company and Melissa A. Waterhouse (incorporated by reference from Exhibit 10.26 to the Company’s Current Report on Form 8-K filed with the Commission on April 25, 2012)

Certification of the Chief Executive Officer/Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheet, (ii) Statements of Income (iii) Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements.

21

SIGNATURES

In accordance with the requirements of
the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMERICAN BIO MEDICA CORPORATION

(Registrant)

By: /s/ Stan Cipkowski

Stan Cipkowski

Chief Financial Officer/Chief Executive Officer

Principal Financial Officer

Principal Accounting Officer

Dated: November 14, 2012

22

EX-31.1
2
v326216_ex31-1.htm
EXHIBIT 31.1

Exhibit 31.1/Exhibit 31.2

CERTIFICATION

I, Stan Cipkowski, certify that:

1. I have reviewed this quarterly report
on Form 10-Q of American Bio Medica Corporation;

2. Based on my knowledge, this report does
not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:

a. Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

b. Designed such internal control
over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness
of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any
change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.

/s/ Stan Cipkowski

Stan Cipkowski

Chief Executive Officer/Chief Financial Officer

Principal Executive Officer/Principal Financial Officer

Principal Accounting Officer

Date: November 14, 2012

EX-32.1
3
v326216_ex32-1.htm
EXHIBIT 32.1

Exhibit 32.1/Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002

In connection with
the Quarterly Report of American Bio Medica Corporation (the “Company”) on Form 10-Q for the period ending September
30, 2012 as filed with the Securities and Exchange Commission on November 14, 2012 (the “Report”), I, Stan Cipkowski,
Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant
to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully
complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.

/s/ Stan Cipkowski

Stan Cipkowski

Chief Executive Officer/Chief Financial Officer

Principal Executive Officer/Principal Financial Officer

Principal Accounting Officer

November 14, 2012

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<p style="text-align: justify; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><b>&#160;</b></p><p style="text-align: justify; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><b>Note C &#8211; Litigation </b></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On December 16, 2010, we filed a complaint in the Supreme Court of the State of New York in Columbia County against Martin R. Gould (&#8220;Gould&#8221;), Jacqueline Gale (&#8220;Gale&#8221;), Advanced Diagnosticum Products, Inc. (&#8220;ADPI&#8221;) and Biosure, Inc. (&#8220;Biosure&#8221;), together the &#8220;Defendants&#8221;. The complaint alleges that Gould, our former Chief Science Officer and Executive Vice President of Technology, and Gale, our former Vice President of Manufacturing and Development, were performing illegal, competitive, employment-related services for ADPI and Biosure during their employment with the Company, were using Company resources to perform such services, and were doing so in their capacity as employees and/or officers of ADPI and Biosure. Because the Defendants continue to engage in illegal activity, in addition to the compensatory and punitive damages noted below, the complaint also seeks an injunction restraining the Defendants from engaging in further wrongdoing. The Defendants exercised their right to move the action to federal court, and proceedings are now pending in the United States District Court for the District of New Jersey.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">In the Complaint, we assert claims of breach of duty of loyalty, breach of contract, violation of fiduciary duty and unfair competition and conversion specifically against Gould, and claims of breach of duty, violation of fiduciary duty and unfair competition and conversion specifically against Gale. In addition to these claims, we assert claims of conversion, tortious interference with contract, interference with prospective advantage and common law misappropriation of trade secret information against all Defendants. We are seeking judgment on nine (9) causes of action for compensatory damages against Defendants in such amount as may be established at trial, together with punitive damages in the amount of one million dollars ($1,000,000) for each cause of action in the Complaint (totaling $9,000,000).</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On March 28, 2011, the Defendants filed an Answer to our Complaint and Defendant Gould filed a counter-claim against the Company in the amount of $150,000 alleging breach of contract related to an employment agreement between Gould and the Company. We filed a reply to Gould&#8217;s counterclaim on April 13, 2011. Our reply asserted that the Company did not breach the prior employment agreement in place with Gould, that the Company provided the required written notice of non-renewal of Gould&#8217;s employment agreement, and that Gould&#8217;s employment agreement expired on May 31, 2010; at which time Gould became an at-will employee of the Company. Gould was subsequently terminated for cause on July 28, 2010. A conference was held with the court on June 16, 2011, at which issues in dispute were discussed and a discovery schedule was set. The Company has responded to the Defendants discovery requests and as of the date of this report, the Company is awaiting complete responsive discovery items from Defendants. Depositions in the matter are ongoing. Depositions and discovery were expected to be completed by April 30, 2012, however, pretrial discovery was extended to September 28, 2012 due to an unexpected personal issue that occurred involving the Defendants attorney; this unexpected issue was unrelated to the case or the claims of the case. On September 11, 2012, pretrial discovery was extended again to December 14, 2012.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As previously disclosed, we received a warning letter from the U.S. Food and Drug Administration (&#8220;FDA&#8221;) in July 2009 that alleges we re marketing our point of collection oral fluid drug test, OralStat, in workplace settings without marketing clearance or approval. A warning letter is considered by FDA to be informal and advisory. While a warning letter communicates FDA&#8217;s position on a matter it does not commit the FDA to taking enforcement action. We communicated to the FDA our belief (based on legal opinion) that marketing clearance was not required in non-clinical markets. The FDA continued to disagree with our interpretation of FDA regulations related to medical devices, and the FDA continued to assert jurisdiction of drug testing performed in the workplace. We also advised FDA that we were willing to obtain marketing clearance but that specific technical and scientific issues existed when attempting to utilize FDA&#8217;s draft guidance for our OralStat (because the draft guidance was written for urine drug tests). Nevertheless, we were unable to reach a consensus with the FDA on neither the jurisdiction issue nor the technical issues.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On July 10, 2012, we announced in a press release and a Current Report on Form 8-K that we entered into a Consent Decree of Permanent Injunction (the &#8220;Consent Decree&#8221;) with FDA. Under the terms of the Consent Decree, we will be allowed to continue to market our OralStat drug test in the workplace market while we take action to obtain a 510(k) marketing clearance. More specifically, FDA will provide the Company with its most recent guidance on the clinical and analytical studies that need to be conducted to gather data in support of a 510(k) submission for OralStat. We will then have a total of 396 days to discuss protocols with FDA, complete our analytical and clinical studies and submit a substantially complete 510(k). We have agreed to withdraw the OralStat product from the workplace market if any of the following events occur: 1) we do not submit a substantially complete 510(k) within this specified time period, 2) we fail to submit additional information within time frames specified by FDA, 3) we withdraw our submission, or 4) our 510(k) submission results in FDA&#8217;s determination that the product is not substantially equivalent. On August 3, 2012 the Consent decree was approved and entered by the United States District Court for the Northern District of New York, and on August 3, 2012, we received guidance from FDA. We are currently taking actions that will enable us to submit a 510(k) marketing application to FDA within the time frame specified under the Consent Decree.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">In addition, from time to time, the Company is named in legal proceedings in connection with matters that arose during the normal course of business. While the ultimate result of any such litigation cannot be predicted, if we are unsuccessful in defending any such litigation, the resulting financial losses could have an adverse effect on the financial position, results of operations and cash flows of the Company. We are aware of no significant litigation loss contingencies for which management believes it is both probable that a liability has been incurred and that the amount of the loss can be reasonably estimated.</p><p style="text-align: justify; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><b>Note D &#8211; Line of Credit and Debt</b></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><u>Loan and Security Agreement with Medallion Financial Corp (&#8220;Medallion&#8221;)</u></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On April 20, 2012 (the &#8220;Closing Date&#8221;), we entered into a Loan and Security Agreement (the &#8220;Loan Agreement&#8221;) with Medallion, a Senior Lender, to refinance the Company&#8217;s Line of Credit with Rosenthal.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">Under the Loan Agreement, Medallion is providing the Company with up to $1,000,000 under a revolving secured line of credit (the &#8220;Medallion Line of Credit&#8221;), which is secured by a first security interest in all of the Company&#8217;s receivables, inventory, and intellectual property rights along with a second security interest in the Company&#8217;s machinery and equipment. The maximum amount available under the Medallion Line of Credit is subject to an Advance Rate that consists of: 85% of eligible accounts receivable and up to 30% of eligible inventory (not to exceed $150,000). &#8220;Eligible Receivables&#8221; are defined as those receivables that are paid within ninety (90) days of the invoice date. Eligible Receivables consists of both domestic sales and those international sales made in North America. An Eligible Receivable becomes ineligible if more than 25% of the aggregate receivables due from a customer are more than ninety (90) days past due or the aggregate receivables from a customer exceed 25% of the then total outstanding Eligible Receivables. &#8220;Eligible Inventory&#8221; is defined as raw materials and finished goods that are not obsolete or unmerchantable and are acceptable to Medallion.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">From the loan availability on the Closing Date, we drew approximately $566,000 to pay off our Line of Credit with Rosenthal and Rosenthal, Inc. (&#8220;Rosenthal&#8221;); see below for further information on the Rosenthal Line of Credit).</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We were charged a facility fee of 1% of the balance of the Medallion Line of Credit on the Closing Date and will be charged the same facility fee of 1% on each anniversary of the Closing Date thereafter. Under the Loan Agreement, interest on outstanding borrowings is payable monthly and is charged at an annual rate equal to 4% above a base rate (which is the Wall Street Journal Prime as published from time to time. As of the date of this report, the Wall Street Journal Prime is 3.25%). If we were to default under the Loan Agreement, interest on outstanding borrowings under the Medallion Line of Credit would be charged at an annual rate of 2% above the interest rate in effect at the time of such default. We are subject to two audits per year by Medallion (provided we are not in default) at a rate of $950.00 per person per day. Prior to closing, we also paid a non-refundable fee in the amount of $10,000 to Medallion for field exam and due diligence costs.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">So long as any obligations are due to Medallion under the Medallion Line of Credit, we must maintain stockholders&#8217; equity of at least $1,750,000, and as of the date of this report, we are in compliance with this requirement.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We incurred $20,000 in costs related to the Medallion Line of Credit. These costs were fully expensed in the nine months ended September 30, 2012.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We incurred $8,000 and $31,000 in interest expense in the three and nine months ended September 30, 2012, respectively (no interest expense was incurred in the three and nine months ended September 30, 2011 as we did not close on the Medallion Line of Credit until April 2012).</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The amount outstanding on the Medallion Line of Credit at September 30, 2012 was $565,000. Additional loan availability was $107,000, for a total Loan Availability of $672,000 as of September 30, 2012. No amounts were outstanding or available at September 30, 2011, as we did not close on the Medallion Line of Credit until April 2012.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i><u>Rosenthal Line of Credit</u></i></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We previously entered into a Financing Agreement (the &#8220;Financing Agreement&#8221;) with Rosenthal. On February 28, 2012, we gave Rosenthal written notice of non-renewal as provided under the Financing Agreement, and as a result, the Financing Agreement terminated on May 31, 2012.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">Under the Financing Agreement, Rosenthal provided the Company with up to $1,500,000 under a revolving secured line of credit (&#8220;Rosenthal Line of Credit&#8221;). The Rosenthal Line of Credit was collateralized by a first security interest in all of the Company&#8217;s accounts receivables, inventory, and intellectual property, and a second security interest in our machinery and equipment, leases, leasehold improvements, furniture and fixtures. The maximum availability of $1,500,000 was subject to an availability formula based on certain percentages of accounts receivable and inventory, and elements of the availability formula were subject to periodic review and revision by Rosenthal. Under the Financing Agreement, we paid Rosenthal an administrative fee of $1,500 per month and an annual fee of $15,000. There were additional administrative fees paid that totaled $7,000 and $23,000 in the three and nine months ended September 30, 2011, respectively (there were no ($0) additional administrative fees charged in the three and nine months ended September 30, 2012). Under the Financing Agreement, interest was payable monthly, and was charged at variable rates (based on the Prime Rate), with minimum monthly interest of $4,000. We incurred $0 and $19,000, respectively in interest expense in the three and six months ended September 30, 2012. We incurred $14,000 and $42,000, respectively, in interest expense in the three and nine months ended September 30, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We incurred $41,000 in costs related to the Rosenthal Line of Credit. These costs were amortized over the three-year term of the Rosenthal Line of Credit; with the remaining $4,000 in costs being amortized in the second quarter of 2012. We amortized $0 and $7,000, respectively, in the three and nine months ended September 30, 2012. We amortized $4,000 and $11,000, respectively, in costs in the three and nine months ended September 30, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">In April 2012, we drew approximately $566,000 from our Medallion Line of Credit to pay off the Rosenthal Line of Credit so the amount due on the Rosenthal Line of Credit as of September 30, 2012 was $0. The amount outstanding on the Rosenthal Line of Credit at December 31, 2011 was $397,000, with $361,000 of this amount outstanding collateralized by accounts receivable at an interest rate of 8% and $36,000 collateralized by inventory at an interest rate of 9%. Additional loan availability was $159,000, for a total Loan Availability of $556,000 as of December 31, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i><u>First Niagara Bank Mortgage Consolidation Loan (&#8220;Mortgage Consolidation Loan&#8221;)</u></i></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On February 23, 2011, we amended and extended our Mortgage Consolidation Loan with First Niagara Bank (&#8220;First Niagara&#8221;). The amended Mortgage Consolidation Loan has a maturity date of March 1, 2013, and has a 6-year (72 month) amortization. The principal amount of the amended Mortgage Consolidation Loan is $815,000 with a fixed interest rate of 8.25%. The monthly payment of principal and interest is $14,000 and payments commenced on March 1, 2011. We were required to make a $15,000 principal payment at the time of closing of the amended Mortgage Consolidation Loan. We also incurred approximately $2,000 in costs associated with this amendment, which were legal costs incurred by First Niagara and passed on to the Company. These costs were fully amortized as of September 30, 2012. The amended Mortgage Consolidation Loan continues to be secured by our facility in Kinderhook, New York as well as various pieces of machinery and equipment. All other terms of the Mortgage Consolidation Loan remain unchanged, including compliance with a covenant (measured monthly) to maintain a certain level of liquidity (defined as any combination of cash, marketable securities or borrowing availability under one or more credit facilities other than the Mortgage Consolidation Loan). As of the date of this report, we are in compliance with this covenant.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The balance on the Mortgage Consolidation Loan was $639,000 at September 30, 2012 and $725,000 at December 31, 2011. Interest expense recognized in the nine months ended September 30, 2012 was $43,000 and interest expense recognized in the nine months ended September 30, 2011 was $50,000. Interest expense was $14,000 and $16,000, respectively, during the three months ended September 30, 2012 and September 30, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i><u>Copier Leases</u></i></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">In May 2007, we purchased a copier through an equipment lease with RICOH in the amount of $17,000. The term of the lease is five years with an interest rate of 14.11%. In April 2012, we notified RICOH that we were opting to purchase the copier for $1.00 as provided in our lease. The amount outstanding on this lease was $0 at September 30, 2012 and $3,000 at December 31, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">In October 2010, we purchased a copier through an equipment lease with Marlin Leasing in the amount of $4,000. The term of the lease is three years with an interest rate of 14.46%. The amount outstanding on this lease was$1,000 at September 30, 2012 and $2,000 at December 31, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i><u>Debenture Financing</u></i></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">In August 2008, we completed an offering of Series A Debentures (&#8220;Series A Debentures&#8221;) and received gross proceeds of $750,000. The net proceeds of the offering of Series A Debentures were $631,000 after $54,000 of placement agent fees and expenses, legal and accounting fees of $63,000 and $2,000 of state filing fees.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The Series A Debentures accrued interest at a rate of 10% per annum (payable by the Company semi-annually). As placement agent, Cantone Research, Inc. (&#8220;Cantone&#8221;) received a placement agent fee of $52,500, or 7% of the gross principal amount of Series A Debentures sold. In addition, we issued Cantone a four-year warrant to purchase 30,450 shares of the Company&#8217;s common stock at an exercise price of $0.37 per share (the closing price of the Company&#8217;s common shares on the date of closing) and a four-year warrant to purchase 44,550 shares of the Company&#8217;s common stock at an exercise price of $0.40 per share (the closing price of the Company&#8217;s common stock on the Series A Debentures completion date). All warrants issued to Cantone were immediately exercisable upon issuance. We registered the common shares underlying the Series A Debentures in a registration statement on Form S-3 filed with the SEC on April 15, 2009 and amended on May 5, 2009. On June 10, 2009, the SEC issued a notice of effectiveness related to this Form S-3, as amended.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We incurred $131,000 in expenses related to the offering, including $12,000 in expense related to warrants issued to Cantone. We amortized $19,000 of expense related to these debt issuance costs in the nine months ended September 30, 2012, of which a little under $2,000 was share based payment expense related to the Cantone warrants, and $24,000 of expense in the nine months ended September 30, 2011, of which just over $2,000 was share based payment expense related to the Cantone warrants. We amortized $3,000 of expense in the three months ended September 30, 2012 and $8,000 of expense in the three months ended September 30, 2011; of which less than $1,000 was share based payment expense related to the Cantone warrants in both periods.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The unamortized balance was $0 as of September 30, 2012 (as the Series A Debentures matured on August 1, 2012) and $19,000 as of December 31, 2011. We also had $0 in accrued interest expense related to the Series A Debentures at September 30, 2012 and $31,000 December 31, 2011. The Company recognized $44,000 in interest expense during the nine months ended September 30, 2012 and $56,000 in interest expense during the nine months ended September 30, 2011. The Company recognized $6,000 in interest expense in the three months ended September 30, 2012 and $19,000 in interest expense in the three months ended September 30, 2011.</p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i><u>Series A Debenture Extension</u></i></p>
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<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The Series A Debentures matured on August 1, 2012. On July 25, 2012, we entered into a Placement Agent Agreement (the &#8220;Agent Agreement&#8221;) with Cantone. Under the terms of the Agent Agreement, Cantone acted as our exclusive placement agent in connection with an amendment of the Series A Debentures. Under the amendment, the term of Series A Debentures was extended to reflect a due date of August 1, 2013, and the interest rate during the extension period was increased from 10% to 15% per annum, due quarterly in arrears.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As compensation for their placement agent services, Cantone received a cash fee of 5% of the gross amount of existing Series A Debentures, or $37,500, and the warrants issued to Cantone (in connection with their services as placement agent in the original Series A Debenture financing) were amended to reflect a purchase price of $0.17 per share and a new term of three (3) years. Cantone also received 1% of the gross amount of Series A Debentures, or $7,500, as a non-accountable expense allowance and we reimbursed Cantone $5,000 in legal fees incurred in connection with the amendment of the Series A Debentures. We will amortize the costs (totaling $50,000) associated with the amendment of the Series A Debentures over the term of the extension (12 months). We amortized $8,000 of these costs in the three months ended September 30, 2012.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On July 30, 2012, we entered into a Bridge Loan Agreement and Note (the &#8220;Bridge Loan&#8221;) with Cantone Asset Management, LLC (&#8220;CAM&#8221;). The Bridge Loan is in the amount of $150,000 and was used to pay $100,000 to those Holders of Series A Debentures that did not wish to amend/extend the Series A Debentures and $50,000 was used to pay placement agent fees and expenses previously indicated in the previous paragraph.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The maturity date of the Bridge Loan is August 1, 2013 and it bears simple interest in advance of 15%. In addition to the interest, on August 1, 2012, the Company instructed its transfer agent to issue CAM restricted stock of the Company equal to 10% of the gross amount of existing Series A Debentures, or $15,000 using a value of $0.17 per common share. On August 8, 2012, 88,235 restricted common shares were issued to CAM.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On July 31, 2012, we entered into an Agreement to the Series A Debenture (the &#8220;Debenture Amendment&#8221;) with thirty-two of the thirty-seven holders of Series A Debentures (the &#8220;Debenture Holders&#8221;) (representing $645,000 of Series A Debentures). As previously indicated, the Debenture Amendment extends the due date of the Series A Debenture to August 31, 2013 and increased the interest rate to 15% per annum, payable quarterly in arrears. All other terms of the Series A Debentures remain unchanged. Five of the Debenture Holders (representing $105,000 in Series A Debentures) did not wish to extend the Series A Debentures and we used proceeds of $100,000 from the Bridge Loan and $5,000 paid directly from the Company to pay principal amounts due to these non-extending Debenture Holders.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On August 1, 2012, the Company entered into a Consulting Agreement (&#8220;Consulting Agreement&#8221;) with CAM. The Consulting Agreement commenced August 1, 2012 and ends on August 1, 2013. Under the terms of the Consulting Agreement, CAM will provide the Company with financial advisory services and advice related to debt refinancing. On August 1, 2012, the Company issued CAM warrants to purchase 300,000 shares of the Company&#8217;s common stock at an exercise price of $0.16 per share (the closing price of the Company&#8217;s common shares on August 1, 2012). The warrants are exercisable through July 31, 2015 and have piggyback registration rights (see Part I, Item 1, Note E, &#8220;Series A Debenture Extension-Warrants&#8221;).</p><p style="text-align: justify; margin: 0pt 0px; font: bold 10pt times new roman, times, serif;">Note E &#8211; Stock Option Grants / Warrant Grants</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><u>Rosenthal Financing Option Grants</u></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As a condition to the Financing Agreement with Rosenthal, our Chief Executive Officer, Stan Cipkowski (&#8220;Cipkowski&#8221;) was required to execute a Validity Guarantee (the &#8220;Validity Guarantee&#8221;) that includes representations and warranties with respect to the validity of the Company&#8217;s receivables and guarantees the accuracy of the Company&#8217;s reporting to Rosenthal related to its receivables and inventory. The Validity Guarantee places Cipkowski&#8217;s personal assets at risk in the event of a breach of such representations, warranties and guarantees. As part of the compensation for his execution of the Validity Guarantee, on July 1, 2009, Cipkowski was awarded an option grant representing 500,000 common shares of the Company under its Fiscal 2001 Stock Option Plan (the &#8220;2001 Plan&#8221;), at an exercise price of $0.20, the closing price of the Company&#8217;s common shares on the date of the grant. The option grant vests over 3 years in equal installments, and the first 33% (165,000 common shares) of the grant vested on July 1, 2010, the second 33%, (165,000 common shares) vested on July 1, 2011 and the final 34% (170,000 common shares) vested on July 1, 2012. We recognized $78,000 in share-based payment expense amortized over the required service period of 3 years. We recognized $13,000 in share-based payment expense for this grant in the nine months ended September 30, 2012 and $20,000 in share-based payment expense in the nine months ended September 30, 2011. We recognized $0 in share-based payment expense for this grant in the three months ended September 30, 2012 and $6,000 in share-based payment expense in the three months ended September 30, 2011. As of September 30 2012, there was $0 in unrecognized expense with 0 months remaining.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As another condition to the Financing Agreement with Rosenthal, the Company&#8217;s President and Chairman of the Board, Edmund M. Jaskiewicz (&#8220;Jaskiewicz&#8221;) was required to execute an Agreement of Subordination and Assignment (&#8220;Subordination Agreement&#8221;) related to $124,000 owed to Jaskiewicz by the Company as of June 29, 2009 (the &#8220;Jaskiewicz Debt&#8221;). Under the Subordination Agreement, the Jaskiewicz Debt was not payable, was junior in right to the Rosenthal Line of Credit and no payment could be accepted or retained by Jaskiewicz unless and until the Company satisfied in full any obligations to Rosenthal. Furthermore, the Jaskiewicz Debt was assigned and transferred to Rosenthal as collateral for the Rosenthal Line of Credit.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As compensation for his execution of the Subordination Agreement, on July 1, 2009 Jaskiewicz was awarded an option grant representing 50,000 common shares of the Company under its 2001 Plan at an exercise price of $0.20, the closing price of the Company&#8217;s common shares on July 1, 2009. The option grant (50,000 common shares) was 100% immediately exercisable on July 31, 2009. We recognized $8,000 during the year ended December 31, 2009 in share-based payment expense related to the grant of Jaskiewicz&#8217;s options upon issuance of the grant.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On July 1, 2010 (the first anniversary of the original stock option grant date of July 1, 2009), Jaskiewicz was awarded a second option grant representing 50,000 common shares of the Company under the Company&#8217;s 2001 Plan, at an exercise price of $0.07, the closing price of the Company&#8217;s common shares on July 1, 2010. The option grant (50,000 common shares) was 100% immediately exercisable on July 1, 2010. During the year ended December 31, 2010, we recognized $3,000 in share-based payment expense for this grant.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On July 1, 2011, (the second anniversary of the original stock option grant date of July 1, 2009), Jaskiewicz was awarded an additional option grant representing 50,000 common shares of the Company under the Company&#8217;s 2001 Plan, at an exercise price of $0.12, the closing price of the Company&#8217;s common shares on July 1, 2011. The option grant (50,000 common shares) was 100% immediately exercisable on July 1, 2011. We recognized the full share-based payment expense of $6,000 in the three months ended September 30, 2011.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><u>December 2010 Employee Grant</u></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On December 31, 2010, we issued options to purchase 275,000 shares of common stock under the 2001 Plan to 4 members of senior management and 8 other employees of the Company at an exercise price of $0.09 (the closing price of the Company&#8217;s common shares on December 31, 2010). These option grants vested 100% (275,000 common shares) on December 31, 2011. We recognized $25,000 in share-based payment expense over the required service period of one year. We recognized $0 in share-based payment expense related to these grants in the nine months ended September 30, 2012, and $20,000 of this expense in the nine months ended September 30, 2011. As of September 30, 2012, there was $0 in unrecognized expenses with 0 months remaining.</p>
<p style="text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><u>Medallion Line of Credit Stock Options</u></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As a condition to the Medallion Line of Credit, Cipkowski and our controller J. Duncan Urquhart (&#8220;Urquhart&#8221;) were each required to execute Validity Guarantees (the &#8220;Validity Guarantees&#8221;). Under the Validity Guarantees, Cipkowski and Urquhart provide representations and warranties with respect to the validity of our receivables as well as guaranteeing the accuracy of our reporting to Medallion related to the Company&#8217;s receivables.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>&#160;</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>Cipkowski Medallion Grant</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As compensation for his execution of the Validity Guarantee, on April 20, 2012, Cipkowski was awarded an option grant representing 250,000 common shares of the Company under the Company&#8217;s Fiscal 2001 stock option plan, at an exercise price of $0.18, the closing price of our common shares on April 20, 2012. The option grants vest over three (3) years in installments of 33% on April 20, 2013 (82,500 common shares), 33% on April 20, 2014 (82,500 common shares) and 34% (85,000 common shares) on April 20, 2015.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The fair value of the Cipkowski stock option grants was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions were used: dividend yield of 0%; risk-free interest rate of 1.99; expected life of 10 years; and stock price volatility of 88%. The value of the stock option grant is $45,000 and the Company will recognize this share-based payment expense over the vesting period of 3 years. We recognized $4,000 in share-based payment expense in the three months ended September 30, 2012 and $8,000 in the nine months ended September 30, 2012. As of September 30, 2012, there was $37,000 in unrecognized share-based payment expense with 30 months remaining.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>&#160;</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>Urquhart Medallion Grant</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As compensation for his execution of the Validity Guarantee, on April 20, 2012, Urquhart was awarded an option grant representing 250,000 common shares of the Company under the Company&#8217;s Fiscal 2001 stock option plan, at an exercise price of $0.18, the closing price of our common shares on April 20, 2012. The option grants vest over three (3) years in installments of 33% (82,500 common shares) on April 20, 2013, 33% (82,500 common shares) on April 20, 2014 and 34% (85,000 common shares) on April 20, 2015.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The fair value of the Urquhart stock option grant was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions were used: dividend yield of 0%; risk-free interest rate of 1.99; expected life of 10 years; and stock price volatility of 88%. The value of the stock option grant is $45,000 and the Company will recognize this share-based payment expense over the vesting period of 3 years. We recognized $4,000 in share-based payment expense in the three months ended September 30, 2012 and $8,000 in the nine months ended September 30, 2012. As of September 30, 2012, there was $37,000 in unrecognized share-based payment expense with 30 months remaining.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>&#160;</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>Jaskiewicz Medallion Grant</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">As another condition to the Medallion Line of Credit, Jaskiewicz was required to execute another Subordination Agreement (&#8220;Subordination Agreement&#8221;) related to the Jaskiewicz Debt (the $124,000 currently owed to Jaskiewicz by the Company). Under the Subordination Agreement, the Jaskiewicz Debt is not payable, is junior in right to the Medallion Line of Credit and no payment may be accepted or retained by Jaskiewicz for the Jaskiewicz Debt unless and until we have paid and satisfied in full any obligations to Medallion. As compensation for his execution of the Subordination Agreement, on April 20, 2012 Jaskiewicz was awarded an option grant representing 150,000 common shares of the Company under the Company&#8217;s Fiscal 2001 stock option plan, at an exercise price of $0.18, the closing price of the Company&#8217;s common shares on April 20, 2012. The option grant vests over three (3) years in installments as follows: 33% (49,500 common shares) on April 20, 2013, 33% (49,500 common shares) on April 20, 2014 and 34% (51,000 common shares) on April 20, 2015.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">The fair value of the Jaskiewicz stock option grant was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions were used: dividend yield of 0%; risk-free interest rate of 1.99; expected life of 10 years; and stock price volatility of 88%. The value of the stock option grant is $27,000 and the Company will recognize this share-based payment expense over the vesting period of 3 years. We recognized $2,000 in share-based payment expense in the three months ended September 30, 2012 and $4,000 in share-based payment expense in the nine months ended September 30, 2012. As of September 30, 2012, there was $23,000 in unrecognized share-based payment expense with 30 months remaining.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;<i>&#160;</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>CRI Warrants</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On July 31, 2012, we issued CRI warrants to purchase 75,000 shares of the Company&#8217;s common stock at an exercise price of $0.17 per share (the closing price of the Company&#8217;s common shares on July 31, 2012) (&#8220;CRI Warrants&#8221;). The CRI warrants are exercisable through July 31, 2015 (see Part I, Item I, Note E, &#8220;Series A Debenture Extension&#8221;). The fair value of the CRI Warrants was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions were used: dividend yield of 0%; risk-free interest rate of 1.51; expected life of 3 years; and stock price volatility of 77%. The value of the CAM Warrant is $12,000 and the Company recognized $12,000 (or the full expense) in share based payment expense in the three and nine months ended September 30, 2012.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><i>CAM Warrants</i></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">On August 1, 2012, we issued CAM warrants to purchase 300,000 shares of the Company&#8217;s common stock at an exercise price of $0.16 per share (the closing price of the Company&#8217;s common shares on August 1, 2012) (&#8220;CAM Warrants&#8221;). The CAM Warrants are exercisable through July 31, 2015 and have piggyback registration rights (see Part I, Item I, Note E, &#8220;Series A Debenture Extension&#8221;). The fair value of the CAM Warrants was estimated utilizing the Black-Scholes option-pricing model. The following weighted average assumptions were used: dividend yield of 0%; risk-free interest rate of 1.56; expected life of 3 years; and stock price volatility of 77%. The value of the CAM Warrant is $48,000 and the Company recognized $48,000 (or the full expense) in share based payment expense in the three and nine months ended September 30, 2012.</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><u>September 2012 Employee Grants</u></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;"><font style="font: 10pt times new roman, times, serif;">On September 20, 2012, we issued 2 stock option grants to purchase 50,000 shares (for a total of 100,000) of the Company&#8217;s common stock to 2 non-executive employees at an exercise price of $0.18 (the closing price of the Company&#8217;s common shares on September 20, 2012). Both option grants vest over 3 years in installments as follows: 33% (33,000 common shares total) on September 20, 2013, 33% (33,000 common shares total) on September 20, 2014 and 34% (34,000 common shares total) on September 20, 2015.</font></p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;</p>
<p style="text-align: justify; text-indent: 0.5in; margin: 0pt 0px; font: 10pt times new roman, times, serif;">We will recognize $18,000 in share-based payment expense over the vesting period of 3 years. We recognized less than $1,000 in share-based payment expense related to these grants in the three and nine months ended September 30, 2012. As of September 30, 2012, there was over $17,000 in unrecognized expenses with 35 months remaining.</p><div>Potential common shares outstanding as of September 30, 2012 and 2011:
<div style="text-align: justify; margin: 0pt 0px; font: 10pt times new roman, times, serif;">&#160;&#160;</div>
<p style="text-align: justify; margin: 0pt 0px; font: 10pt times new roman, times, serif;"></p>
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<tr style="vertical-align: bottom;">
<td nowrap="nowrap">&#160;</td>
<td style="padding-bottom: 1pt;" nowrap="nowrap">&#160;</td>
<td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap">&#160;</td>
<td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">September 30, 2012</td>
<td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap">&#160;</td>
<td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap">&#160;</td>
<td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">September 30, 2011</td>
<td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap">&#160;</td>
</tr>
<tr style="background-color: #ccffcc; vertical-align: bottom;">
<td style="width: 32%; font-weight: bold;">Warrants</td>
<td style="width: 1%; font-weight: bold;">&#160;</td>
<td style="width: 1%;">&#160;</td>
<td style="width: 1%;">&#160;</td>
<td style="text-align: right; width: 31%;">375,000</td>
<td style="width: 1%;">&#160;</td>
<td style="width: 1%;">&#160;</td>
<td style="width: 1%;">&#160;</td>
<td style="text-align: right; width: 30%;">75,000</td>
<td style="width: 1%;">&#160;</td>
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<tr style="background-color: white; vertical-align: bottom;">
<td style="font-weight: bold;">Options</td>
<td style="font-weight: bold;">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="text-align: right;">3,139,080</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="text-align: right;">3,081,580</td>
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XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB
8
abmc-20120930_lab.xml
XBRL TAXONOMY EXTENSION LABEL LINKBASE
Document and Entity Information [Abstract]Document And Entity Information [Abstract]Entities [Table]Entities [Table]Statement [Line Items]Statement [Line Items]Entity Registrant NameEntity Registrant NameEntity Central Index KeyEntity Central Index KeyCurrent Fiscal Year End DateCurrent Fiscal Year End DateEntity Filer CategoryEntity Filer CategoryTrading SymbolTrading SymbolEntity Common Stock, Shares OutstandingEntity Common Stock, Shares OutstandingDocument TypeDocument TypeAmendment FlagAmendment FlagDocument Period End DateDocument Period End DateDocument Fiscal Period FocusDocument Fiscal Period FocusDocument Fiscal Year FocusDocument Fiscal Year FocusStatement Of Financial Position [Abstract]Statement of Financial Position [Abstract]Statement [Table]Statement [Table]AssetsASSETSCash and Cash EquivalentsCash and cash equivalentsCash and cash equivalents - beginning of periodCash and cash equivalents - end of periodAccounts Receivable, Net Of Allowance For Doubtful Accounts Of 66,000 At September 30, 2011, and 76,000 At December 31, 2010Accounts receivable, net of allowance for doubtful accounts of $50,000 at September 30, 2012, and $66,000 at December 31, 2011Inventory, Net Of Allowance For Slow Moving and Obsolete Inventory Of 207,000 At September 30, 2011 and 213,000 At December 31, 2010Inventory, net of allowance for slow moving and obsolete inventory of $469,000 at September 30, 2012 and $401,000 at December 31, 2011Prepaid Expenses and Other Current AssetsPrepaid expenses and other current assetsTotal Current AssetsTotal current assetsTotal current assetsProperty, Plant and Equipment, NetProperty, plant and equipment, netDebt Issuance Costs, NetDebt issuance costs, netFinite-Lived Patents, GrossPatents, netOther AssetsOther assetsTotal AssetsTotal assetsTotal assetsLiabilities and Stockholders EquityLIABILITIES AND STOCKHOLDERS’ EQUITYCheck Written In Excess Of Cash BalancesChecks written in excess of cash balanceChecksWrittenInExcessOfCashBalance.Accounts Payable, CurrentAccounts payableAccrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilitiesAccrued expenses and other current liabilitiesEmployee-Related Liabilities, CurrentWages payableLine Of CreditLine of creditCurrent Portion Of Long-Term DebtCurrent portion of long-term debtCurrent Portion Of Unearned GrantCurrent portion of unearned grantTotal Current LiabilitiesTotal current liabilitiesTotal current liabilitiesOther Liabilities, NoncurrentOther liabilitiesLong-Term DebtLong-term debtNotes Payable, Related Parties, NoncurrentNotes Payable, Related Parties, NoncurrentRelated party noteTotal LiabilitiesTotal liabilitiesTotal liabilitiesStockholders EquityStockholders’ equity:Preferred Stock Par Value .01 Per Share 5,000,000 Shares Authorized, None Issued and Outstanding At September 30, 2011 and December 31, 2010Preferred stock; par value $.01 per share; 5,000,000 shares authorized, 0 issued and outstanding at September 30, 2012 and December 31, 2011Common Stock Par Value .01 Per Share 50,000,000 Shares Authorized 21,744,768 Issued and Outstanding At September 30, 2011 and December 31, 2010Common stock; par value $.01 per share; 50,000,000 shares authorized; 21,833,003 issued and outstanding at September 30, 2012 and 21,744,768 issued and outstanding at December 31, 2011Additional Paid-In CapitalAdditional paid-in capitalAccumulated DeficitAccumulated deficitTotal Stockholders EquityTotal stockholders' equityTotal stockholders’ equityTotal Liabilities and Stockholders EquityTotal liabilities and stockholders' equityTotal liabilities and stockholders’ equityAccounts Receivable, Allowance For Doubtful AccountsAccounts receivable, allowance for doubtful accounts (in dollars)Inventory, Allowance For Slow Moving and Obsolete InventoryInventory, allowance for slow moving and obsolete inventory (in dollars)Preferred Stock, Par ValuePreferred stock, par value (in dollars per share)Preferred Stock, Shares AuthorizedPreferred stock, shares authorizedPreferred Stock, IssuedPreferred stock, shares issuedPreferred Stock, OutstandingPreferred stock, shares outstandingCommon Stock, Par ValueCommon stock, par value (in dollars per share)Common Stock, Shares AuthorizedCommon stock, shares authorizedCommon Stock, IssuedCommon stock, shares issuedCommon Stock, OutstandingCommon stock, shares outstandingIncome Statement [Abstract]Income Statement [Abstract]Net SalesNet salesCost Of Goods SoldCost of goods soldGross ProfitGross profitGross profitOperating Expenses [Abstract]Operating expenses:Research and DevelopmentResearch and developmentSelling and MarketingSelling and marketingGeneral and AdministrativeGeneral and administrativeOperating ExpensesOperating Expenses, TotalOperating Expenses, TotalOperating Income (Loss)Operating lossOperating (loss) / incomeOther ExpenseOther income / (expense):Loss On Disposal Of Property, Plant and EquipmentLoss on disposal of property, plant and equipmentLoss on disposal of property, plant and equipmentInterest Income, OtherInterest incomeInterest ExpenseInterest expenseInterest expenseNonoperating Income (Expense)Nonoperating Income (Expense), TotalNonoperating Income (Expense), TotalNet Income (Loss) Before TaxNet loss before taxNet loss before taxIncome Tax ExpenseIncome tax (expense) / benefitIncome tax benefit / (expense)Net LossNet lossNet lossBasic and Diluted Income (Loss) Per Common ShareBasic and diluted loss per common share (in dollars per share)Weighted Average Number Of Shares Outstanding, Basic and DilutedWeighted average number of shares outstanding - basic and diluted (in shares)Statement Of Cash Flows [Abstract]Statement of Cash Flows [Abstract]Cash Flows From Operating ActivitiesCash flows from operating activities:Adjustments To Reconcile Net Loss To Net Cash Provided By (Used In) Operating ActivitiesAdjustments to reconcile net loss to net cash provided by / (used in) operating activities:DepreciationDepreciationAmortization Of Debt Issuance CostsAmortization of debt issuance costsProvision For Bad DebtsProvision for bad debtsProvision For Reduction Of Doubtful AccountsProvision for bad debtsProvision For Slow Moving and Obsolete InventoryProvision for slow moving and obsolete inventoryProvision for Reduction of Inventory ReservesProvision for slow moving and obsolete inventoryShare-Based CompensationShare-based CompensationShare-based payment expenseChanges InChanges in:Accounts ReceivableAccounts receivableAccounts receivableInventoryInventoryInventoryIncrease (Decrease) In Prepaid Expense and Other AssetsPrepaid expenses and other current assetsPrepaid expenses and other current assetsIncrease (Decrease) In Accounts PayableAccounts payableIncrease (Decrease) In Accrued Liabilities and Other Operating LiabilitiesAccrued expenses and other current liabilitiesAccrued expenses and other current liabilitiesIncrease (Decrease) In Employee Related LiabilitiesWages payableWages payableIncrease (Decrease) In Other Operating AssetsOther assetsIncrease (Decrease) In Other Operating LiabilitiesOther liabilitiesNet Cash Provided By (Used In) Operating ActivitiesNet cash provided by / (used in) operating activitiesNet cash (used in) / provided by operating activitiesCash Flows From Investing ActivitiesCash flows from investing activities:Purchase Of Property, Plant and EquipmentPurchase of property, plant and equipmentPurchase of property, plant and equipmentPatent Application CostsPatent application costsIt represents Patent application costs.Net Cash Used In Investing ActivitiesNet cash used in investing activitiesNet cash used in investing activitiesCash Flows From Financing ActivitiesCash flows from financing activities:Payments On Debt FinancingPayments on debt financingPayments on debt financingDebt Issuance CostDebt issuance costsProceeds From LoansProceeds from bridge loanProceeds From Issuance Of DebtProceeds from equipment loanNet Proceeds From Line Of CreditNet proceeds from line of creditNet proceeds from line of creditNet Cash Provided By (Used In) Financing ActivitiesNet cash provided by / (used in) financing activitiesNet cash provided by / (used in) financing activitiesNet cash provided by / (used in) financing activitiesNet Increase (Decrease) In Cash and Cash EquivalentsNet increase / (decrease) in cash and cash equivalentsNet decrease in cash and cash equivalentsSupplemental Disclosures Of Cash Flow InformationSupplemental disclosures of cash flow informationCash Paid During Period For InterestCash paid during period for interestIncome Taxes PaidCash paid during period for taxesOrganization, Consolidation and Presentation Of Financial Statements [Abstract]Organization, Consolidation and Presentation of Financial Statements [Abstract]Basis Of Accounting [Text Block]Basis of Accounting [Text Block]Earnings Per Share [Abstract]Earnings Per Share [Abstract]Earnings Per Share [Text Block]Earnings Per Share [Text Block]Commitments and Contingencies Disclosure [Abstract]Commitments and Contingencies Disclosure [Abstract]Legal Matters and Contingencies [Text Block]Legal Matters and Contingencies [Text Block]Debt Disclosure [Abstract]Debt Disclosure [Abstract]Debt Disclosure [Text Block]Debt Disclosure [Text Block]Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]Disclosure of Compensation Related Costs, Share-based Payments [Abstract]Disclosure Of Compensation Related Costs, Share-Based Payments [Text Block]Disclosure of Compensation Related Costs, Share-based Payments [Text Block]Schedule Of Earnings Per Share Reconciliation [Table Text Block]Schedule of Earnings Per Share Reconciliation [Table Text Block]Class Of Warrant Or Right, OutstandingWarrantsShare-Based Compensation Arrangement By Share-Based Payment Award, Options, Outstanding, NumberOptionsLoss Contingencies By Nature Of Contingency [Axis]Loss Contingencies by Nature of Contingency [Axis]Loss Contingency, Nature [Domain]Loss Contingency, Nature [Domain]Pending Litigation [Member]Each Cause Of Actions [Member]Each Cause Of Actions [Member].Litigation Settlement, GrossLitigation Settlement, GrossLoss Contingency Number Of Causes Of Actions Against DefendantsLoss Contingency Number of Causesof Actions Against DefendantsRepresents number of causes of actions against defendants during the period.Line Of Credit Facility [Axis]Line of Credit Facility [Axis]Line Of Credit Facility, Lender [Domain]Line of Credit Facility, Lender [Domain]Medallion [Member]Rosenthal [Member]First Niagara Bank Mortgage Consolidation Loan [Member]R I C O H [Member]Marlin Leasing [Member]Series Debentures [Member]Cantone Series One Four Year Warrants [Member]Wall Street Journal Prime [Member]Wall Street Journal Prime member.Short-Term Debt, Type [Axis]Short-term Debt, Type [Axis]Short-Term Debt, Type [Domain]Short-term Debt, Type [Domain]Bridge Loan [Member]Debt Instrument [Axis]Debt Instrument [Axis]Debt Instrument, Name [Domain]Debt Instrument, Name [Domain]Thirty Seven Debentures Holders [Member]Five Debentures Holders [Member]Line Of Credit Facility, Affiliated BorrowerLine of Credit Facility, Affiliated BorrowerLine Of Credit Facility, Maximum Borrowing CapacityLine of Credit Facility, Maximum Borrowing CapacityLine Of Credit Facility Advance Rate On Eligible Accounts ReceivableLine Of Credit Facility Advance Rate On Eligible Accounts ReceivableThe percentage of eligible receivable included in advance rate for line of credit.Line Of Credit Facility Advance Rate On Eligible InventoryLine Of Credit Facility Advance Rate On Eligible InventoryThe percentage of eligible inventory included in advance rate for line of credit.Line Of Credit Facility, Amount OutstandingLine of Credit Facility, Amount OutstandingLine Of Credit Non Refundable FeesLine Of Credit Non Refundable FeesThe amount of non refundable fees incurred for field exam and due diligence costs for the line of credit facility.Minimum Maintainable EquityMinimum Maintainable EquityMinimum amount of share holders equity to be maintained to comply with the agreement.Minimum amount of share holders equity to be maintained to comply with the agreement.Interest and Debt ExpenseInterest and Debt ExpenseInterest Expense, DebtInterest Expense, DebtLine Of Credit Fecility Availability Of Additional LoansLine Of Credit Fecility Availability Of Additional LoansThe Availability OF Additional Loans Line Of Credit Fecility during the period.Line Of Credit Facility Administrative Fees Amount For MonthLine Of Credit Facility Administrative Fees Amount For MonthAmount of the fees associated with administrative credit facilityfor month.Line Of Credit Facility Administrative Fees Amount For YearLine Of Credit Facility Administrative Fees Amount For YearAmount of the fees associated with administrative credit facility for year.Line Of Credit Facility Additional Administrative Fees AmountLine Of Credit Facility Additional Administrative Fees AmountAmount of the additional fees associated with administrative credit facilityLine Of Credit Facility Monthiy Interest RateLine Of Credit Facility Monthiy Interest RateMinimum monthly interest of based on the Prime Rate during the reporting period.Line Of Credit Facility, Periodic Payment, InterestLine Of Credit Facility Periodic Payment InterestLine Of Credit Facility Amount Outstanding Collateralized By Accounts ReceivableLine Of Credit Facility Amount Outstanding Collateralized By Accounts ReceivableCollateralized agreement of Line Of Credit Facility Amount Outstanding based on notes receivable.Line Of Credit Facility Collateralized By Accounts Receivable Interest RateLine Of Credit Facility Collateralized By Accounts Receivable Interest RateThe interest rate of Collateralized agreement of Line Of Credit Facility Amount Outstanding based on notes receivable.Line Of Credit Facility Amount Outstanding Collateralized By InventoryLine Of Credit Facility Amount Outstanding Collateralized By InventoryCollateralized agreement of Line Of Credit Facility Amount Outstanding based on inventory.Line Of Credit Facility Amount Outstanding Collateralized By Inventory Interest RateLine Of Credit Facility Amount Outstanding Collateralized By Inventory Interest RateThe interest rate of Collateralized agreement of Line Of Credit Facility Amount Outstanding based on inventory.Line Of Credit Facility, Current Borrowing CapacityLine of Credit Facility, Current Borrowing CapacityDebt Consolidation Loan, Maturity DateDebt Consolidation Loan, Maturity DateThe date at which the mortgage consolidation loan matures.Debt Consolidation Loan Amortization PeriodDebt Consolidation Loan Amortization PeriodDebt Consolidation Loan,amortization period.Debt Consolidation Loan, AmountDebt Consolidation Loan, AmountThe sum of the mortgage consolidation loan.Mortgage Consolidation Loan Interest RateMortgage Consolidation Loan Interest RateMortgage Consolidation Loan with a fixed interest rate during the period.Line Of Credit Facility, Periodic PaymentLine of Credit Facility, Periodic PaymentDebt Instrument, Periodic Payment, PrincipalDebt Instrument, Periodic Payment, PrincipalLegal FeesLegal FeesDebte Consolidation Loan OutstandingDebte Consolidation Loan OutstandingThe Outstanding Debte Consolidation Loan during the period.Capital Lease ObligationsCapital Lease ObligationsCapital Lease Obligation Maturity PeriodCapital Lease Obligation Maturity PeriodThe lease maturity period of copier through an equipment lease.Capital Lease Obligation Interest RateCapital Lease Obligation Interest RateThe Interest Rate of Capital Lease Obligation during the period.Capital Lease Obligation OutstandingCapital Lease Obligation OutstandingThe Outstanding of Capital Lease Obligation during the period.Capital Lease AgreementCapital Lease AgreementIt represents term and conditions provided in the lease agreement.Debentures Gross Proceeds ValueDebentures Gross Proceeds ValueThe proceeds value of Debentures during the period.Debentures Net Proceeds ValueDebentures Net Proceeds ValueThe net proceeds value of Debentures during the period.Debt Issuance Agent Fee and ExpensesDebt Issuance Agent Fee and ExpensesThe Net proceeds of Placement Agent Fees And Expenses during the period.Debt Issuance Legal and Accounting FeeDebt Issuance Legal and Accounting FeeThe Net proceeds of Legal And Accounting Fees during the period.Debt Issuance State Filing FeeDebt Issuance State Filing FeeThe Net proceeds of State Filing fees during the period.Placement Agent Fee PercentagePlacement Agent Fee PercentageThe percentage of gross principal amount received.Class Of Warrant Or Right, Number Of Securities Called By Warrants Or RightsClass of Warrant or Right, Number of Securities Called by Warrants or RightsClass Of Warrant Or Right, Exercise Price Of Warrants Or RightsClass of Warrant or Right, Exercise Price of Warrants or RightsClass Of Warrant Or Right, Expense Or Revenue RecognizedClass of Warrant or Right, Expense or Revenue RecognizedSeries Debentures In Filling PeriodSeries A Debentures In Filling PeriodSeries A Debentures In registration statement filiing Period.Series Debentures In Amended PeriodSeries A Debentures In Amended PeriodSeries A Debentures In registration statement amended Period.Amortization Of Debt Issuance CostAmortization Of Debt Issuance CostDebt issuance Amortization cost during the period.Allocated Share-Based Compensation ExpenseShare-based Compensation Arrangement by Share-based Payment Award, Compensation CostLine Of Credit Facility, Commitment Fee DescriptionLine of Credit Facility, Commitment Fee DescriptionLine Of Credit Facility, Covenant TermsLine of Credit Facility, Covenant TermsDebt Instrument, Interest Rate TermsDebt Instrument, Interest Rate TermsDebt Instrument Default Interest Rate TermsDebt Instrument Default Interest Rate TermsDescription of the interest rate on default outstanding borrowings.Line Of Credit Facility, Interest Rate During PeriodLine of Credit Facility, Interest Rate During PeriodDebt Instrument, Interest Rate, Stated Percentage Rate Range, MinimumDebt Instrument, Interest Rate, Stated Percentage Rate Range, MinimumDebt Instrument, Interest Rate, Stated Percentage Rate Range, MaximumDebt Instrument, Interest Rate, Stated Percentage Rate Range, MaximumPercentage Of Cash Fee Of Gross Amount Of Existing DebenturesPercentage Of Cash Fee Of Gross Amount Of Existing DebenturesPercentage of cash fee of gross amount of existing debentures.Placement Agent Services CompensationPlacement Agent Services CompensationAmount of placement agent services compensation.Warrants Issued Amended Purchase Price Per ShareWarrants Issued Amended Purchase Price Per SharePurchase price per share of warrants issued amended.Warrants Issued Amended TermWarrants Issued Amended TermPeriod of warrants issued amended.Non Accountable Expense Allowance Percentage On Gross Amount Of DebenturesNon Accountable Expense Allowance Percentage On Gross Amount Of DebenturesNon-accountable expense allowance percentage on gross amount of debentures.Non Accountable Expense AllowanceNon Accountable Expense AllowanceAmount of non-accountable expense allowance.Reimbursed In Legal FeesReimbursed In Legal FeesAmount of reimbursed in legal fees.Amortization Period Of DebenturesAmortization Period Of DebenturesAmortization period of debentures.Bridge LoanBridge LoanPayments To Debentures HoldersPayments To Debentures HoldersThe cash outflow associated with debentures holders.Payments To Placement Agent Fees and ExpensesPayments To Placement Agent Fees and ExpensesThe cash outflow associated with placement agent fees and expenses.Debt Instrument, Maturity DateDebt Instrument, Maturity DatePercentage Of Simple Interest In Advance Of Bridge LoanPercentage Of Simple Interest In Advance Of Bridge LoanSimple Interest In Advance Of Bridge Loan.Percentage Of Gross Amount Of Existing Debentures To Issue Restricted StockPercentage Of Gross Amount Of Existing Debentures To Issue Restricted StockPercentage of gross amount of existing debentures to issue restricted stock.Stock Issued During Period, Value, Restricted Stock Award, Net Of ForfeituresStock Issued During Period, Value, Restricted Stock Award, Net of ForfeituresRestricted Stock Award Issued Price Per ShareRestricted Stock Award Issued Price Per SharePrice per share restricted stock award issued.Stock Issued During Period, Shares, Restricted Stock Award, Net Of ForfeituresStock Issued During Period, Shares, Restricted Stock Award, Net of ForfeituresDebt, CurrentDebt, CurrentDebt Instrument, Interest Rate, Stated PercentageDebt Instrument, Interest Rate, Stated PercentageNon Extend Of DebenturesNon Extend Of DebenturesAmount of non extented debentures.Proceeds From Short-Term DebtProceeds from Short-term DebtWarrants Issued To Purchase Of Common StockWarrants Issued To Purchase Of Common StockNumber of warrants issued to purchase of common stock.Plan Name [Axis]Plan Name [Axis]Plan Name [Domain]Plan Name [Domain]Two Thousand and One Plan [Member]Medallion Financing Stock Option [Member]Medallion Financing Stock Option.Major Types Of Debt and Equity Securities [Axis]Major Types of Debt and Equity Securities [Axis]Major Types Of Debt and Equity Securities [Domain]Major Types of Debt and Equity Securities [Domain]Employee Option Grant [Member]Rosenthal Financing Stock Option [Member]September 2012 Employee Grants [Member]Stock Options Vested Period [Axis]Stock Options Vested Period [Axis]Stock Options Vested Period [Domain]Stock Options Vested Period [Domain]September 20, 2013 [Member]September 20, 2014 [Member]September 20, 2015 [Member]April 20, 2013 [Member]April 20, 2014 [Member]April 20, 2015 [Member]Equity Components [Axis]Equity Components [Axis]Equity Component [Domain]Equity Component [Domain]Cam Warrants [Member]Cri Warrants [Member]Deferred Bonus and Profit Sharing Plan By Title Of Individual [Axis]Deferred Bonus and Profit Sharing Plan by Title of Individual [Axis]Title Of Individual With Relationship To Entity [Domain]Title of Individual with Relationship to Entity [Domain]Two Non-Executive Employees [Member]Related Party [Axis]Related Party [Axis]Related Party [Domain]Related Party [Domain]Cipkowski [Member]Urquhart [Member]Jaskiewicz [Member]Cipkowski Medallion Grant [Member]Urquhart Medallion Grant [Member]Jaskiewicz Medallion Grant [Member]Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Vested and Expected To Vest, PercentageShare Based Compensation Arrangement By Share Based Payment Award Options Vested and Expected To Vest PercentageShare-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, PercentageStock Options Grant VestedStock Options Grant VestedNumber of stock options grant vested.Share Based Payment Expense Amortized Over Service PeriodShare-based Payment Expense Amortized Over Service Periodshare-based payment expense amortized over the required service period.Shares Held In Employee Stock Option Plan, AllocatedShares Held in Employee Stock Option Plan, AllocatedShares Held in Employee Stock Option Plan, Allocated (in shares)Percentage Of Stock Option Grant ExercisablePercentage Of Stock Option Grant ExercisableEmployee Service Share-Based Compensation, Nonvested Awards, Total Compensation Cost Not Yet Recognized, Period For RecognitionEmployee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for RecognitionShare-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, GrossShare-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, GrossStock Granted During Period, Value, Share-Based Compensation, GrossStock Granted During Period, Value, Share-based Compensation, GrossShare-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Expected Dividend RateShare-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend RateShare-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest RateShare-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest RateShare-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Expected TermShare-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected TermShare-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Expected Volatility RateShare-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility RateShare-Based Compensation Arrangement By Share-Based Payment Award, Award Vesting PeriodShare-based Compensation Arrangement by Share-based Payment Award, Award Vesting PeriodShare-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Grants In PeriodShare-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in PeriodShare Based Compensation Arrangement By Share Based Payment Award Other Than Stock Options Granted Exercise Price Per ShareShare Based Compensation Arrangement By Share Based Payment Award Other Than Stock Options Granted Exercise Price Per ShareShare based compensation arrangement by share based payment award otherthan stock options granted exercise price.Warrant Expense In FutureWarrant Expense In FutureAmount of warrant expense in future.Extension Period Of WarrantsExtension Period Of WarrantsExtensionPeriodOfWarrants.Purchase Of Shares By Granted Of Stock OptionsPurchase Of Shares By Granted Of Stock OptionsNumber of shars purchase by granted of stock options.Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise PriceShare-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price (in dollars per share)Installments Periods Of Vested OptionInstallments Periods of Vested OptionVested Option installmant installments Period year.Subordinated DebtSubordinated DebtAmortized Share Based Payment ExpensesAmortized Share-based Payment Expensesshare-based payment expense amortized over the required during the servisse period.Employee Service Share-Based Compensation, Nonvested Awards, Total Compensation Cost Not Yet RecognizedEmployee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet RecognizedDue To AffiliateDue to AffiliateShare-Based Compensation Arrangements By Share-Based Payment Award, Options, Grants In Period, Weighted Average Exercise PriceShare-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise PriceShare Based Payment Expense In FutureShare-based Payment Expense in FutureIn Future Share-based Payment Expense allocated in current period.Fair Value Assumptions, Expected Dividend RateFair Value Assumptions, Expected Dividend RateFair Value Assumptions, Risk Free Interest RateFair Value Assumptions, Risk Free Interest RateFair Value Assumptions, Expected TermFair Value Assumptions, Expected TermFair Value Assumptions, Expected Volatility RateFair Value Assumptions, Expected Volatility RateAdjustments To Additional Paid In Capital, Share-Based Compensation, Requisite Service Period Recognitionstock option grants recognize this share-based payment expenseEmployee Service Share-Based Compensation, Nonvested Awards, Total Compensation Cost Not Yet Recognized, Stock Optionsstock option grants unrecognized this share-based payment expenseCommitments and ContingenciesCOMMITMENTS AND CONTINGENCIESAntidilutive Securities Excluded From Computation Of Earnings Per Share, AmountAntidilutive Securities Excluded from Computation of Earnings Per Share, AmountMinimum [Member]Cantone Series Two Four Year Warrants [Member]Line Of Credit Facility, Asset RestrictionsLine of Credit Facility, Asset RestrictionsLine Of Credit Facility, Covenant Terms, Minimum Tangible Net Worth, AmendedLine Of Credit Facility, Covenant Terms, Minimum Tangible Net Worth, AmendedMinimum Tangible Net Worth, Line of credit facility Covenant Terms Amended during the period.Line Of Credit Facility, Covenant Terms, Minimum Tangible Net Worth, InitialLine Of Credit Facility, Covenant Terms, Minimum Tangible Net Worth, InitialThe Minimum working Capital Requirment Before Financing Agreement during the periodLine Of Credit Facility, Covenant Terms, Minimum Tangible Net WorthLine Of Credit Facility, Covenant Terms, Minimum Tangible Net WorthMinimum Tangible Net Worth of line of credit convenant during the period.Line Of Credit Facility, Percentage Of Additional Charge On Payment DefaultLine Of Credit Facility, Percentage Of Additional Charge On Payment DefaultThe percentage of charges to be paid for termination of Financing Agreement Before the date of termination.Percentage Premium Payable On Contract Termination, Loss On Contract TerminationPercentage Premium Payable On Contract Termination, Loss On Contract TerminationThe percentage of charges to be paid on payment default of Line of Credit Facility during the period.Line Of Credit Facility, Remaining Borrowing CapacityLine of Credit Facility, Remaining Borrowing CapacityLine Of Credit Facility Amount Of Financial Amortized Cost TotalLine Of Credit Facility Amount Of Financial Amortized Cost TotalThe line of credit amortized cost under the financial agreement during the period.Line Of Credit Facility Amount Of Financial Agreement Costs Unamortized CostLine Of Credit Facility Amount Of Financial Agreement Costs Unamortized CostThe line of credit amortized cost under the financial agreement over the term during the period.Unamortized Balance Of Legal CostUnamortized Balance Of Legal CostThe amount of expense provided in the period for legal costs incurred on unamortized cost for the year ended.Debt Instrument, Increase, Accrued InterestDebt Instrument, Increase, Accrued InterestLine Of Credit Financial Agreement Termination DateLine Of Credit Financial Agreement Termination DateDate the credit facility of financial agreement terminates, in CCYY-MM-DD format.Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Net Of ForfeituresShare-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of ForfeituresEX-101.PRE
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abmc-20120930_pre.xml
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE